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La Ventana Real Estate, Baja Mexico

Property Acquisition in Baja   ~   Real Estate Purchasing and Visa Requirements Baja Mexico   ~   List Your Property With LVX  ~   Helpfull Mexico Info

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Real Estate Purchasing Steps in Baja Mexico - General Information

The Main Entity in a Legal Mexican Real Estate Transaction ~ The Notario Publico

The Notario Publico in Mexico has special attributes and has a different capacity than a North American Notary Public:
A Notario must practice as a lawyer for at least five years before allowed to practice as a Notario. They are appointed by the State Governor as a public official, who provides the role of a lawyer invested with the authority to attest documentation.
Notarios in Baja Mexico orchestrate all legal Real Estate Transactions, and many other legal transactions and other legal contracts.
Notario Publicos are governed at a local or state level by a separate Law.
For approximately every 30,000 people in an area of Baja Mexico, one Notario is appointed. The Notario is legally responsible and will ensure that all documentation is in order and that all legal procedures have been properly adhered to.
Documents brought before the Notario are regarded as officially certified documents in Baja Mexico and are recorded in Public Registers.
In Mexico, every legal contract must be made before a Notario Publico for it to be valid.

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Third Party Legal Council - Does one need an Attorney if a Notario in Baja Mexico ensures that all the correct procedures in a Mexican Real Estate transaction have been followed?

Notarios are not in position to give Legal Council since they represent both parties and mainly ensure for proper documentation. Although a Lawyer/Attorney is not absolutely necessary for a real estate transaction in Baja Mexico, they can help immenseley with the orchestration of one's transaction, and keep an eye out for possible short comings etc.
You may also want to have an Attorney represent you, through a Power of Attorney, since you may not be in Mexico to complete the entire transaction. Another consideration when purchasing property in Baja Mexico is, if one does not speak or read sufficient Spanish, most all Mexican Attorneys speak excellent English.
Note: Any documents one signs and does not understand, may be subject to validity. One should have all important documents translated into English by an official translator. (Fee is approx. 20 US$ per page.)

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Know Your Budget for Real Estate Closing Costs - Baja Mexico

General Percentage Total of Closing Costs (US$) - when constituting a new Fideicomiso Trust, Excluding Attorney and/or Closing Coordinator, Translation and Title Insurance fees, for a residential property can average close to:
10 - $20,000 25% ~ 20 - $50,000 25 to 15% ~ 50 - $100,000 15 to 10% ~ 100 - $150,000 10 to 6% ~ 150 - $250,000 5% ~ 250 - $350,000 4.5% ~ 350 - $500,000 3.5% ~ 500 - and up 3 - 2.5%

Approximate Break Down of Costs associated with the purchase of a 30.000 US$ lot in the La Ventana Area of Baja Mexico.
Ones Real Estate Transaction Fees fluctuate and are percentage based on the assesed Property Value and Purchase Amount.
Purchase and Sales Agreement drafted by a closing coordinator = $300
First Right of Refusal ~ Derecho Del Tanto ~ = $100
Ministry of Foreign Affairs Mexico ~ Secretaria de Relaciones Exteriores ~ (SRE) Permit & Registration = $1600
Notario Fee for all closing transactions including the Fideicomiso Contract ~ Contrato de Fideicomiso ~ = $1300
the Notarios fees are fixed/regulated at a % which fluctuates pending the purchase price
Honarary (Initial) Bank Fee for Fideicomiso = $300
Property Appraisal ~ Avaluo ~ Required for the Banks Annual Fideicomiso Administration and Property Aquisition Tax = $300
Acquisition Tax ~ Impuesto Sobre Adquisision ~ = 2% of Appraised Property Value (not purchase cost)
Certificate of No Liens ~ Certificado de Libertad de Gravamen ~ = $40
Certificate of Tax Payment ~ Certificado de No Aduedo de Predial ~ = $80
Public Registry Fee = 1.5% of purchase price
Closing Coordinator Fee = $1300

Escrow Account (a good idea) Fee = $500
Title Insurance (Optional) = 5 - 7$ per 1000

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Property and Documentation Checks - Some Things to Ask

Is Title held through a valid Deed - Escitura Publica ~
If possble have the deed looked over by a Notario Publico or a Mexican Attorney for validity.
~ If the seller is a married Mexican National, the couple both hold rights to the property, or if the property is jointly owned, all owners must be in agreement with the sale and all may have to sign as required.
~ Check that all buildings have the required building permits and are on tax registers, and that the utilities have been legally installed. ~ Obtain copies of above and receipts including (but not limited to): up-to-date tax receipts for the property, public utilities bills (shown as paid), any applicable building or land permits, plus up-to-date land-service fees shown as paid.
~ Capital Gains Tax ~ Impuesto Sobre la Renta ~ The seller is normally responsible for the payment of the Capital Gains Tax, the exact amount will be determined by the Notario Publico.

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Step -1- Oferta - How it works making the Offer here in Baja

The initial offer can be done on a hand shake, or you may want to have something simple done in writing.
Once a price is accepted and if title is in an Ejido Members name and prior to signing a more formal Purchase/Sales Agreement ask for the completion of the ~ Derecho del Tanto ~, this is the first right of refusal process and absouloutley necessary for ~ Ejido Land ~ to be transferred legitmately.

If purchasing through a Mexican Corporation, you will naturally need to Incorporate. The cost for this on average is 2 to 3 thousand US dollars. If incorporating you should address this within the terms of the Sales/Purchase Agreement as - subject to Incorporation, or better yet have the Incorporation completed prior, which can take 6 to 8 weeks.

Step -2- Convenio de Compra/Venta - Purchase/Sales Agreement

Once you and the seller have agreed to a Price its time for the ~ Convenio de Compra Venta ~. This should detail deadlines, such as acceptance within 48 hrs., costs, inclusions such as clear title etc, and any exclusions. Along with the PS Ageement one will provide a monetary deposit equaling (5-10%), use of a third party escrow account for this is advised.
An important inclusion pertaining to the provision of No Liens Outstanding should be made within the PS Agreement, which will be supported by the ~ Certificado de no Adeudo ~. All land taxes need to have been paid for the last 5 years to date, and utilities such as water, phone, electric, gas need to have been paid for the last 2 years. You are not liable to debts beyond these durations. Mexican Law states that liens not accounted for, are passed on with title of the land. Cancellation terms if either party neglects on their behalf (usually equal to the deposit) should be set, and other terms, such as a "Preventive Notice" which supports the property as being frozen and therefore not possibly beiing offered to someone else for purchase during closing time. It is also recommended to include a "letter of Instruction from the seller which indicates, they will sign over the property rights to the Bank" who will hold the Fideicomiso. Also make for provisions in the PS Agreement on how the Capital Gains Tax ~ Impuesto Sobre la Renta ~ will be accounted for. The signing of the PS Agreement will take place in front of the Notario, at their office.

Step -3- Contrato de Fideicomiso - Fideicomiso Trust Contract

Once the Convenio de Compra/Venta - has been signed, and the deposit payment has been met and after all paper work has been approved such as the Deed, Permits etc., then (if the property is located within the 50/100km coastal/border region) the Fideicomiso Application will start, under the watch and coordination of the Notario.

In conjuction with the Fideicomiso, you will need to supply your closing coordinator (or Attorney) in Baja Mexico with documentation, such as: Your Passport, Marriage Certificate if applicable, and your Visa (FM Tourist Permit is sufficient) to support that your stay in Baja Mexico is legal for the Permission from the Ministry of Foreign Affairs Mexico, for ones purchase.
Your representative will apply for the Permission from the Secretary of Foreign Affairs to hold a Fideicomiso (this is a standard formality and one of the first things that happens once you are within the Fideicomiso formalities). Related to this you will have to agree to the ~ Calvo Clause ~ (by signature) which states that you will not seek foreign jurisdiction in dealings with ones property transaction.

Step -4- Final Signing of the Contrato de Fideicomiso

Final signing and Final Payment, is done in front of the Notario in his or her office, unless you have appointed a Power of Attorney in conjunction with an Escrow Account. The Notario is ultimately responsible for formalization of the final real estate contract, collection of Funds, and the recording of the transfer with the Public Registry. If there are Capital Gains Taxes they will deal with the transfer and there is a separate document which needs to be notarized by the Notario Publico. It will take perhaps 3 months in Baja Mexico to receive the completed Fideicomiso documents, and also the final registration. Once you have received the final registration, one may want to obtain Title Insurance for the property, at this point.

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Once the above has been completed you have done your deed, no more signatures or payments, other then general yearly property taxes (approx. 0.3%) and Fideicomiso fees (pendant on total sales and or appraised value, approx. 1% per year).
~ Congratulations! From this point on you will be enjoying slipping deeper into the magic and spell of Baja Mexico ~

-Visas- Your Stay In Baja Mexico

FMT - Standard Tourist Visa, if you do not plan to work or stay longer then 6 months in Baja Mexico, then this will work for you.

FM3 - Is more or less a long term residency card and allows you to stay for a whole year is valid for 5 years, and kept current each year by paying a fee. There is a Working (people wanting to generate Income) and Non Working FM3 in Baja Mexico. For a FM3 you are required to prove a steady income of a certain amount, for the year.

FM2 - For People seeking permanent residency, who may eventually seek citizenship in Baja Mexico.

Mexican Citizenship - You must have been and be living in Mexico, for a certain period to apply for this.

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Our real estate information/details are provided to the best of our knowledge but its accuracy is not guaranteed.

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