Baja Investments has developed an efficient and effective system to close a real estate transaction in Mexico. In most cases, a conveyance in Los Cabos can be closed from 60-90 calendar days for a cash transaction or 90-120 calendar days for a transaction involving financing. However, variations in these timelines may occur, albeit rare, due to delays with the trustee bank, municipal permitting, etc.

Initially the closing date is the date established in the offer to acquire or purchase agreement between buyer and seller. It is important however to understand that the closing date is ultimately determined by the Notary. While every effort to meet the date established between the parties will be made, there are many variables to a Mexican closing and many individuals involved including the parties, the Notary and the trustee bank.

A Notary Public (Notario Publico) is a licensed and expert attorney, certified by the state government and appointed as a Notary Public to act as an official and unbiased representative of the government. A Notary in Mexico has far greater responsibility than a notary in the United States.

The Notary performs a variety of tasks including the authentication of legal documents and acts including real estate deeds to title. AII real estate transactions in Mexico must be ratified before a Notary Public and duly recorded with in the Public Registry in order to be valid and enforceable.

In a real estate transaction, the Notary is responsible to both buyer and seller to insure the legality of the transfer of title, as well to calculate and retain Seller’s capital gain tax and Purchaser’s acquisition tax, coordinate appraisals, certificates of no liens, certificates of no debt, request the corresponding permits and record before the cadastral office and public registry. For this service the Notary charges a fee based on the value of the property. There are state and federal appointed notaries.

In the ‘restricted zone’ of Mexico (100 kilometers from the border and 50 kilometers from the coast) a foreigner may purchase real estate only by means of a FIDEICOMISO (Trust). The fideicomiso is a bank trust, granted in a 50-year renewable term, in which the Trustee Bank holds the property in trust for the beneficial use of the purchaser (beneficiary). While the trustee is the ‘legal owner’ of 
the real estate, the beneficiary retains all ownership rights and responsibilities and may sell, lease, improve, mortgage, as well as will the property to heirs. Essentially, the beneficiary of the property enjoys all the rights he would if ownership were fee-simple.

The fideicomiso is authorized via a permit issued by the Mexican Ministry of Foreign Affairs (Secretaria de Relaciones Exteriores) and in accordance with Article 27 of the Mexican Constitution. The trustee bank must obtain this permit on behalf of the beneficiary. In certain circumstances a beneficiary may be assigned the rights of a Seller’s existing trust, provided there is sufficient term left to that trust, this is known as an Assignment of Rights (Cesion de Derechos). The determination to pursue a new trust or to assign the rights of Seller´s existing trust is generally made by the Notary and is often base don the length of term remaining on the trust.

The parties to the fideicomiso are: Trustee (Fiduciario), Purchaser (Fideicomisario) and Seller (Fideicomiente). The Notary (Notario) additionally signs the trust formalizing the transfer.

The Trustee bank is the Mexican bank authorized to act as trustee (Fiduciario). The Trustee Bank must be a Mexican registered financial institution with an established trust department. It is worth mentioning that the properties held in trust are not assets of the bank and size of the bank is not necessarily a sign of better trustee service.

When deciding on the trustee bank the Notary will usually look for a Trustee with a local empowered trustee officer in order to facilitate the closing in a more efficient manner.

In most cases the answer is No. In the majority of transactions the Notary will prepare a simple bank instruction letter with a specific power of attorney for purchaser and seller to sign remotely. These letters will advise the Trustee bank of the Party’s individual intentions in regard to the purchase and sale of the property and direct the trustee to act on their behalf. This letter will be attached to the fideicomiso at closing in lieu of the parties signatures. Please consider that POAs or any document executed outside of Mexico will require apostilles (or certification in case of Canadian documents) and translation from a certified translator.

Unless otherwise negotiated by the parties, the possession of the property is transferred simultaneously with the transfer of title and release of funds from escrow to the Seller.

A purchaser may title the property in any way property could be titled in the US – in their individual name(s) (either via joint tenancy or tenants-in-common), an individual or family trust, an LLC or other US corporation or partnership, etc. This is a matter better determined by Purchaser’s US legal or accounting advisors as tax and legal consequences in Mexico are the same for a foreigner in Mexico regardless of how the property is titled. We recommend to do it individually or through an entity. Please note here that Family Trusts are no longer permitted by most trustee Banks and we do not recommend it.

Property can be titled in a Mexican Corporation and held fee-simple (without a fideicomiso), however in these circumstances the property cannot be used for residential purposes and has to generate income and for investment purposes We suggest that you discuss this option with your US and Mexican legal counsel and financial advisors prior to making this determination.

Currently, the concept of ‘escrow’ is not commonly used in Mexico. To address this, Baja Investments pioneered the use of U.S.-based 3rd party escrow in Mexican real estate transactions.

In a closing with Baja Investments, well-recognized escrow companies are used to ensure secure and smooth transactions. Like in the U.S., the Purchaser and Seller enter into an escrow agreement with the Escrow Company, where all funds are deposited and disbursed in accordance with escrow instructions provided by both parties. Payments can be made to any third party with mutual written authorization. Remaining funds are held in the escrow account until the deed is signed as per the escrow agreement, ensuring security throughout the process.

The notary. In Mexico, real estate transactions typically require more documentation than in the U.S. At Baja Investments, we have a dedicated Closing Officer who manages every step of the transaction from agreement to completion. Our Closing Officer assists with due diligence, the trust process, and guides clients through each contract, ensuring a successful and secure closing.

The parties involved in a Mexican real estate transaction include:

– Buyer and their realtor or legal counsel

– Seller and their realtor or legal counsel

– Notary & Legal Coordinator

– Baja Investments Closing Officer

– Escrow Agent

– Trustee Bank

Baja Investments strongly recommends purchasing title insurance for all transactions. It serves as a protection for property ownership, offering monetary indemnification and safeguarding the buyer’s investment in Mexican real estate.

We recommend a couple of different Closing Attorneys you can chose from that will help you with the closing process from the very start: the offer. 

The title is transferred on the day it is signed by the Purchaser, Seller, Notary, and Trustee Officer. However, the Notary will need to record the deed for public record, a process that typically takes three months or more. Once fully recorded, the Notary will provide a copy to the title insurance company, and the Buyer can retrieve the registered deed.

The local public registry (Registro Publico) is the official record of all property ownership in the municipality. A real estate contract is only validated once it has been registered. The Notary is responsible for registering the transferred deed.

Only the owner’s name(s) are publicly available. Personal details like date of birth, social security numbers, and address are confidential and protected under the new privacy law, with all data kept securely by the Notary and Trustee Bank.

An apostille is a simplified certification process that authenticates documents to be used in foreign countries that have signed the 1961 Hague Convention. When a document is issued in one signatory country, the apostille guarantees its recognition in another, ensuring its validity for legal purposes abroad.

ISABI (Impuesto Sobre Adquisiciones de Bienes Inmuebles) is the acquisition tax charged on every real estate transfer in Mexico. It is typically 2% of the registered value of the property and is paid by the Notary at closing.

Property taxes (Impuestos Prediales) are due annually in Los Cabos and must be paid at the local tax office in San Jose or Cabo San Lucas. Discounts of 10-15% are typically offered if taxes are paid early in the year. Baja Investments can assist with facilitating the payment of these taxes.

The Trustee Bank charges an annual maintenance fee between $464.00 and $812.00 USD (including 16% IVA). These fees are billed to your home address and can be paid via wire transfer. Baja Investments can help facilitate the payment process if needed.

The trustee bank is responsible for managing the property held in trust. The Notary will typically use the same trustee bank that currently holds the property in trust if applicable, especially in private resales. The bank’s empowered officer must be located near Los Cabos for convenience during the transaction.

No. Property held in a fideicomiso by a trustee bank is not considered an asset of the bank. In the event of financial difficulty, the property is transferred to another trustee bank.

Under the Treaty to Avoid Double Taxation, capital gains taxes paid in Mexico can be credited in the U.S. Any other deductible fees should be discussed with your U.S. financial advisor.

Yes. A fideicomiso is initially issued for 50 years, and it can be extended for another 50 years automatically. After 100 years, a new foreign affairs permit is required for further extensions.

An Assignment of Rights (Cesion de Derechos) is a method used in private property resales where the Purchaser assumes the Seller’s existing trust term. This option can lower closing costs and expedite the closing process.

Your attorney can be empowered to sign on your behalf, or they may oversee the documents remotely. This is a decision between you and your legal counsel.

The fideicomiso is drafted and executed in Spanish. However, Baja Investments can provide a translator to offer an English version of the document if needed.

Yes. Beneficiaries can be appointed when creating or transferring a fideicomiso. This process is simple and requires only the beneficiary’s passport information.

Typically, the buyer is responsible for closing costs unless otherwise negotiated. The seller is responsible for capital gains taxes and any personal legal fees.