Real Estate Curious? The Real Estate Purchase Process

By Erwit Reichert

How, When, Who, and What’s Next?

Once you’ve found yourdream home...

Your agent will draft an Offer to Buy. This document includes the proposed purchase price, payment structure (including the down payment—typically 10% of the total price), the terms of the agreement, and any contingencies. It also sets a proposed closing date. In México, an Offer to Buy is a legally binding agreement, enforceable by either party.

From Offer to Contract

Once negotiations are complete and both parties have signed the Offer to Buy, your agent or broker will prepare the Buy-Sell Contract.

If you’re a foreigner purchasing property in Mexico, you’ll need a special permit from the Mexican Ministry of Interior (SEGOB), processed via the Ministry of Foreign Relations (SRE). This permit costs approximately $400 USD per person and is required to appear as “The Buyer” on the Title Deed. At this stage, the buyer must make a deposit—typically 10% of the purchase price—using one of the following methods:

a. Cashier’s check made payable to the seller and held in trust by the seller’s agent until closing,

b. Direct wire transfer,

c. Escrow account.

An inventory list outlining all items included in the sale should be attached as Exhibit A or Addendum A to the contract.

Property Inspection (Recommended)

While not standard practice in Mexico, we strongly recommend a property inspection to evaluate the structure, electrical systems, and plumbing—this can help avoid unexpected issues.

Closing the Deal

The closing must be conducted in the presence of a Notario Público, where the buyer, seller, or their legal representatives (POAs) sign the Escritura (Title Deed). The buyer is responsible for all closing costs—excluding any Capital Gains Tax—which typically range from 4% to 6% of the purchase price, not including the cost of the SRE permits.

The Notario will handle the following:

Professional appraisal of the property

Title search (up to 10 years back) to confirm the absence of liens

Get your SREs.

Issuance of preventive and definitive notices to the Public Property Registry

Drafting and signing of the deed

Retention and payment of taxes to the government on behalf of both parties

Once the deed is signed and payment is confirmed (or the Escrow Account is activated), the Notario will proceed with official registration at the Public Registry. The new owner can expect the first testimony of the registered deed within approximately six weeks. The original deed always remains on file with the Notario.

A Word of Cautionon Ejido Land

Please do not attempt to buy rural (ejido) land without the guidance of a qualified real estate professional. While it is possible and legal, this process is more complex and carries unique risks.

Tip

Always work with a licensed Realtor when buying or selling property in Mexico.

Enjoy the journey—and welcome home!

Erwit Reichert, Broker, San Miguel Properties and current Vice President of AMPI (Professional Association Of Realtors) San Miguel de Allende415 153 5255

www.sanmiguelproperties.mx