How to Buy Real Estate in Mexico

The buying process in Mexico typically follows these steps:

1. Property search and selection with your AMPI-certified real estate agent.
2. Written offer presented to the seller, including price, terms and contingencies.
3. Purchase agreement (Promesa de Compraventa) signed by both parties, with a deposit (typically 10%) held in escrow.
4. Due diligence period: title search, certificates of no liens, and condominium documents reviewed.
5. Fideicomiso application (for properties in the restricted zone) submitted to a Mexican bank.
6. Notario público drafts the closing deed and verifies all documents.
7. Closing: signing at the notario's office, balance of funds transferred, and deed registered with the public registry.

The full process usually takes 30 to 60 days from accepted offer to closing.

A notario público in Mexico is a highly trained government-appointed attorney (very different from a U.S. notary public). The notario is legally required for every real estate transaction and is responsible for verifying the legitimacy of the property, drafting the official deed (escritura), calculating and collecting all federal and state taxes, ensuring the property is free of liens, and registering the transaction with the public registry of property. The notario is a neutral party representing the legality of the transaction itself, not the buyer or seller. Their fees are part of your closing costs.

A Mexican bank account is not required to complete the purchase. Closing funds are typically wired directly from your home-country bank into a Mexican escrow account, then released to the seller at closing. However, many foreign owners choose to open a Mexican bank account after closing to manage property tax payments (predial), HOA fees, utilities, and rental income. Some banks require Mexican residency status (temporary or permanent) to open an account, while others accept passport-only documentation.

Yes. Escrow is used almost universally in Puerto Vallarta and Riviera Nayarit transactions. A neutral third-party escrow company (typically a U.S.-based firm such as Stewart Title or a Mexican equivalent) holds the buyer's deposit and final closing funds in a U.S.-dollar account, releasing them only when all closing conditions are met. Escrow fees typically run $600 to $1,000 USD per transaction and are commonly paid by the buyer (though sometimes split). Escrow protects both parties and is standard practice in cross-border transactions.

Yes. Remote purchases are common, especially for clients who have already visited the area or who are buying pre-construction. The closing itself can be completed via power of attorney (poder): you grant signing authority to a trusted representative (often the notario or a local attorney), allowing them to sign the closing documents on your behalf. The power of attorney must be notarized and apostilled in your home country. We coordinate the full process and use video walkthroughs, drone tours, and live FaceTime visits to help remote buyers feel confident.

Title insurance is a one-time policy that protects you against losses arising from undiscovered defects in title, including undisclosed liens, prior ownership disputes, document fraud, or registration errors. While the notario público verifies title as part of every closing, title insurance from internationally recognized providers like Stewart Title gives foreign buyers an additional layer of protection backed by U.S.-based legal recourse. Title insurance is optional in Mexico but is recommended for most cross-border buyers, especially on higher-value transactions. Premiums typically run 0.5% to 0.7% of the purchase price.

One-time closing costs: Typically 4% to 8% of the purchase price, including acquisition tax (ISAI), notario fees, public registry, fideicomiso setup (~$2,500-$3,500 USD if applicable), appraisal, escrow, and certificates.

Annual ongoing costs:

• Property tax (predial): very low by U.S./Canadian standards, usually $200 to $1,500 USD per year depending on assessed value.
• Fideicomiso annual fee: $500 to $700 USD per year (only for properties in the restricted zone).
• HOA / condo fees: vary widely by property; budget $200 to $1,000+ USD per month for luxury developments.
• Insurance: $300 to $1,500 USD per year depending on coverage.

Mexican real estate held through a fideicomiso is fully inheritable. When you set up the trust, you name primary and secondary beneficiaries, and the property transfers to them automatically upon your death, without the property going through Mexican probate. For properties held directly (outside the restricted zone) or through a Mexican corporation, you should have a Mexican will (testamento) drafted to avoid lengthy probate. We strongly recommend foreign owners establish a Mexican will alongside their home-country estate plan; the cost is typically under $300 USD and the notario can prepare it.

No. You do not need any form of Mexican residency to purchase real estate. A tourist visa (FMM, granted automatically on entry) is sufficient to complete a purchase. However, many of our buyers eventually apply for temporary or permanent residency after purchasing, which provides benefits like easier banking, lower capital gains tax on resale (if the property becomes your primary residence and you hold it more than 5 years), and the ability to import household goods tax-free.

A proper due diligence period (typically 15-30 days) should include:

• Title search with the public registry to confirm clean ownership history.
• Certificate of no liens (Certificado de Libertad de Gravámenes).
• Certificate of no tax debt on predial and water (agua).
• HOA/condo documents: bylaws, financials, special assessments, and minutes of recent meetings.
• Property appraisal (avalúo) by a certified Mexican appraiser.
• Physical inspection: structural, mechanical, electrical, plumbing.
• Verification of permits for any renovations, additions, or new construction.

Coldwell Banker La Costa coordinates all of these on behalf of our buyers as a standard part of every transaction.