If you are not offering the asking price, we prepare an:
1) Offer contract. To prepare an offer contract, we like to make sure you are a serious buyer. In order to do this, we normally require a check made out to Cozumel Living for $1000 USD. If you did not bring any checks, you can leave a $500 USD cash deposit with us. Since we are dealing internationally, sometimes this can be waived if you promise to immediately enter into a Promise Sale contract once the offer has been accepted. In order to prepare an offer contract, we will put the address of the property into the contract, the amount of the offer, then a breakdown of the down payment with dates it will be made. Then we will list any payments and dates that are planned prior to the final payment, then the date and amount of the final payment. This is when the title is transferred over in front of the notario. In most cases, you should be present for the closing, but if it is not possible, there are ways to handle this through a power of attorney. (See #5 for more information on Powers of Attorneys). We will need your signature on the offer contract, then it is submitted to the seller. At that point, just like in the United States, the seller can either accept or counter on the offer contract. If countered, the offer will be returned to us for you to initial and counter, etc. until an accepted price is agreed upon or the offer is rejected and your offer check or money is then returned to you with the offer becoming null and void. If accepted, we immediately enter into the:
2) Promise Sale contract – This contract is to bind the seller to sell to you and to bind you to purchase from the seller. In this contract, we state the buyers and sellers full name, the entire title information of the property, the meters and boundaries of the property, the total amount of the purchase, the date the 20% down payment will be made, dates and amounts of any intermediary payments if there are any, then the date of the final payment at the closing and signing over of the title. There is a 10% penalty in the contract if the buyer or seller backs out of the contract prior to closing. Most goes to the seller or the buyer and the balance goes to the real estate company. The date of the contract and the signatures of the buyers and sellers are also part of the Promise Sale contract.
Yes, the contracts are in English. We can now do contracts only in English if it is between English speaking buyers and sellers. Attorneys now will accept English contracts. If a contract has to go to court though, it has to be officially translated by a government translator. If one party is Spanish, then the contract is always done in both languages.
Cozumel Living holds the escrow, but be careful, other real estate companies in Cozumel give the 20% down payment to the sellers and take their commissions immediately. ONLY COZUMEL LIVING HOLDS THE ESCROW UNTIL FINAL SIGNING OVER OF THE TITLE. You can also pay Stewart Title International to hold the escrow, but I have only had two or three people ever do this in my real estate experience.
Yes, the contracts are in English. We can now do contracts only in English if it is between English speaking buyers and sellers. Attorneys now will accept English contracts. If a contract has to go to court though, it has to be officially translated by a government translator. If one party is Spanish, then the contract is always done in both languages.
The trust agreement is drawn up before a notary public (attorney in Mexico). The Ministry of Foreign Affairs and the Commission on Foreign Investments must have approved the operation, with the trustee requesting this authorization. The participants in the transaction are the seller who must have clear title to property, the bank as trustee, and the buyer or beneficiary of the trust or his representative.
You must pay the trust annual fees punctually. Also, you must pay property taxes, water, and other utilities bills when due.
Financing in Mexico is not common practice. Mexico is a cash based society; however, laws have changed in recent years making financing by US companies safer. We have a web page that offers different options:
But, realize that it is not an easy or an inexpensive procedure. We assist in every way possible, but the Mexican banks that the mortgage companies are choosing to mortgage happen to be the hardest to deal with. The bureaucracy is mind boggling making the normal person burnout before the process is accomplished, but as long as you and the seller understand the process, sometimes we can make it happen.
Insurance can be obtained through ING, Banorte Bank, HSBC bank, and many others. It’s relatively inexpensive and includes hurricane damage. The best time to purchase insurance in Mexico is November – May or non-hurricane season. If you try to purchase hurricane insurance in June – Oct, you are running into higher costs if you can even purchase it. One important thing to remember in Mexico is that our homes are built of concrete, block, and rebar. Unless you are directly on the ocean they do not blow down and they don’t burn down. I know the insurance companies don’t want to hear this, but I have never insured my home that is 3 blocks off the ocean. I see no sense in it. I do however insure properties that sit directly on the ocean. Full coverage on $250,000 runs around $750 USD year. In Wilma of course, we filed a lot of claims and the insurance companies paid. It was a bureaucratic filing process but they did pay.
