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Well, now you’re getting ready to buy your first home in Mexico. Certainly you’re excited and maybe a little apprehensive. It may seem daunting but look around. Hundreds of others have managed to do it and came out not only with a great home in Mexico, but a great investment as well. If they can do it so can you. To be sure your experience goes well do a little advance planning. This is another country and we do things differently than you’re used to in the U.S. or Canada. Take a little time to learn about the process and things will go much, much smoother.
Mexico is a sovereign country with its own legal system, one that is markedly different than that in the U.S. and Canada. Not better, not worse, just different. Foreigners buying property within 50 kilometers of the ocean must place it in trust with a Mexican bank. Ask your realtor to explain the trust and its terms to you in detail. You can also read about the trust at several websites including http://www.loscabosguide.com/realestate/fideicomiso.htm and www.reloscabos.com. Ask all your questions up front and be sure you’re comfortable with the trust.
You’ll also want to familiarize yourself with the closing process and costs. Buyers’ closing costs in Mexico are significant and must be paid in cash prior to closing. Depending on the size of the transaction, these costs can total as much as five percent of purchase price. Get a closing cost estimate from your lending institution and be sure to add this to your budget before you start looking at property.
Reasonable financing is finally available in Mexico. There are a number of lenders who will finance the purchase of a home or condo, or even construction costs, at rates only slightly higher than in the United States. If you will be financing your purchase, it is best to get yourself pre-qualified with the lender before searching out specific properties. Be sure to ask the mortgage lender about closing costs: lenders have their own preferred closing companies and the costs may vary from those your realtor quotes. Be sure to compare carefully. The plus side to using U.S.-based financing is this: the lender is going into partnership with you on this property. And they are very experienced in Mexican real estate. They will not let you make a bad decision: they will protect their own investment as well as yours.
You’ll also want to select a realtor to work with you. There are numerous real estate agents in Cabo; some are more experienced than others. Be sure you’re dealing with a qualified realtor who is affiliated with the local business associations. Unlike most parts of Mexico, Los Cabos has an efficient MLS system so any realtor can show you any property on the market. Mexico also has a national association of realtors; the acronym for the organization is AMPI. Before you arrive in Mexico, start corresponding with a realtor who is a member of one or both organizations. Be very candid about your needs and budget and work out a plan to get together as soon as you arrive. By working in advance, you’ll ensure that your time here in Cabo will be well-spent and increase the odds of finding your perfect Cabo home on the first trip. As this person will likely be your “support group” for the first few months, you’ll want to also be sure that he is ‘simpatico’ with you.
Working with your realtor, try to get a feel for what this property will cost to maintain. Compared to other parts of the world our maintenance costs, as a rule, can be quite reasonable. The exceptions to the rule, however, can be catastrophic. Using the monthly cost on this page, you can predict the monthly carrying charges and determine if this investment is feasible for you.
The process of buying property in Los Cabos is actually quite straightforward - once you’ve done it twenty or thirty or a couple of hundred times. The first time it can be a little confusing. The one most important piece of advice anyone can give you is to go slowly, ask for explanations of anything that is unclear to you, and don’t cut corners. Here in Los Cabos we’ve developed the most sophisticated real estate protocol in Mexico. And it was done to protect the client. Use it.
Remember how great you felt after buying that first home? Well, that was NOTHING compared to the euphoria you’ll feel owning your home here.
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Check list for buyers
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What’s This Going To Cost Me?
What are the real costs of living in paradise?
You’ll be surprised at how affordable it can be.
A Condo in San Jose del Cabo:
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What’s This Going To Cost Me?
What are the real costs of living in paradise?
You’ll be surprised at how affordable it can be.
A House in Pedregal, Cabo San Lucas:
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By Carol Billups
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