House Purchase Experience

You hear a lot of horror stories about real estate deals going bad here in Mexico however our recent experience couldn't be any further from that. We purchased our house through Century 21 with an agent named Juan Tenorio. It was the best service, both before and after, that we have ever seen compared to any agent in Canada. He even hooked up all our services for us and is taking me to pay the water bill and the property taxes (for the remainder of 2013) on Tuesday. We were very impressed.

Our first house purchase in Mexico in April of '97 in San Miguel de Allende was also a dream. No problems whatsoever and the builder even completed some extras that we asked for before we took possession. It certainly can be done.
Congratulations C-Bob!

CB & all, we had a similar positive experience in 2005 when we bought our house through Susan Martin of Eager Realty. It exceeded all expectations and was far superior to our experience NOB.

Had the same experience with our purchase last June....using LLoyds.

SunFan

Same here in 2010. Couldn't sing the praises of my realtor, Derek Trevethan at Ajijic Real Estate any louder plus the builder came back for the following year with any little redos that needed to be done but there weren't that many. Best real estate experience I've ever had. Glad it was the same for you.

Perhaps with all the people getting educated on the do's & don'ts the horror stories will become a thing of the past.

The only hitch we had was the house was held on a joint trust and one hour before closing Bancomer (the trust holder) informed the notorio that they had never been properly notified that the seller's husband passed away about 10 years ago. They said she could notify them now but she would have to pay a property transfer tax on the 50% that she just "inherited". It was about $1100 USD. The woman was totally outraged and was talking about cancelling the deal. She was quickly informed that cancelling the deal would cost her much, much more than the $1100 USD. Regardless, the notorio didn't like that the seller was not happy so he called the Bancomer branch manager and after about 3 hours of negotiating Bancomer waived the transfer tax charge.

The moral of the story here is if you hold property on a joint trust and one partner passes away be sure that the trust holder is properly notified and get it in writing.

CanuckBob wrote:Perhaps with all the people getting educated on the do's & don'ts the horror stories will become a thing of the past.

The problem is not with recent titles, recently built properties, it's the ones which may be generations old. The seller will say they have escritura, and even produce it, but actually you may be buying into a family war, which can take years to sort out in court. The other problem, related to the first, is that up to 20 years ago, it was common for sellers to list the title as 'in progress' (I'm sorry I don't know the Spanish word), therefore avoiding taxes. The buyer would get a reduced price for that type of title. The problem is, down the road when other buyers want the full title, the original owner can hold things up, hoping for a payoff, or all sorts of games. Hopefully Spencer will weigh in with he considers to be 'due diligence' on a full title search, and he offers this as a service. Do not trust Notarios alone to do this work.

I'm happy to hear it all worked out, but I'm surprised that the title business hadn't been cleared up way before COE. That's scary.

Congratulations. You're now a member of the Septiembre St. Irregulars.
Very irregular.

Our first home purchase was with the seller's sister in law who acted as realtor, the owner's daughter worked for a notario. SIL and daughter really went at it to get the commission. Saved ourselves some $. The seller's husband was deceased and she'd never changed the title work, yes trying to avoid taxes. It's been so long ago the details are a bit sketchy but it seems like it was 6-12 months before we picked up our deed and by the time we did, the daughter no longer worked for the notario. Stressed me out but everything was alright. We bought and sold the house Mexican style. 1st load moving out, buyers walked in from the street. :) The most stressful part of that deal was leaving the keys, to the house, in the notario's safe while the buyer's check cleared. There was a tiny problem at the bank, with how the seller wrote my husband's name, but it was quickly resolved. No home inspection other than we asked an architect friend to check out the structure of the building/house.

Buying land here, saw a handmade se vende sign & bought direct from a brother and sister who live out of state, inherited the land from their father, who inherited the land from his father. The notario in Jocotepec cost more than Guadalajara but was really fast. Sometimes you try to save a peso and other times, it pays for better/quicker service.

Glad it was a good experience CBob and the hick up was quickly resolved. :)

Something else too. The estate laws in Mexico are different than in the U.S.A. and Canada in that property is not necessarily passed to a spouse, family or next of kin. The property can pass to anyone named, this was more common with men who kept second (or more!) wives or mistresses but they were unmarried. The will can cut the married wife out - this is not possible in Canada or the U.S.

I assume that's a different type of trust than is needed in the restricted zones

Buying sounds easier than building ;)

Lucky you C.B. That first house in Las Salvias was a nightmare. However I will not bore y'all with the gory details which included a threatening phone call, a visit to our new front door by an attorney, also threatening. Well perhaps things have changed, however I'll never forget just how fast we put those decorative window and door bars went on after someone mentioned busting our kneecaps or worse. I will never deal with 3 people and one R.E. company in this town again, and no I will not mention their names, because I value my kneecaps.

end of story.

Oop's forgot to add, my husband's ex was a realtor. So somebody was right when they said engineers and realtors do not mix. Oil and water without an emulsifier.

In Guadalajara, back several years ago and things change, we were told the spouse would automatically inherit the house so I don't think we bothered putting my name on the deed. The previous owner's wive's name wasn't on the deed. It cost more pesos to do that. Here Lakeside, we included my name and also the names of our children should something happen to us. Sealed signed and delivered.

I assume from other posts that you have made that your new house is in the village. I hope to run into you around the plaza.

This is an important point Chapalagringa -why you should have a Mexican will:

In Mexico, there is no such thing as right of survivorship permitting the property to automatically transfer to the surviving spouse. At the first death, assuming the husband and wife own the property 50/50, an undivided half will be transferred pursuant to the deceased’s will or pursuant to the state’s civil code.

In the event the deceased does not have a will and there are surviving children, it is possible that, even in states with revised Civil Codes such as Guanajuato and Baja California Sur, the surviving spouse will have no more than an equal share with the children. In other words, if Mr. Jones has a wife and four children who survive him, Mrs. Jones will receive only a one-fifth undivided interest in Mr. Jones’s 50% interest in the property.
Mrs. Jones will then have to obtain the permission of her four children in order to mortgage or sell the property her 50% interest and the portion she inherited from her husband.

http://www.settlement-co.com/articles/The_Mexican_Will.pdf

Chapalagringa wrote:In Guadalajara, back several years ago and things change, we were told the spouse would automatically inherit the house so I don't think we bothered putting my name on the deed. The previous owner's wive's name wasn't on the deed. It cost more pesos to do that. Here Lakeside, we included my name and also the names of our children should something happen to us. Sealed signed and delivered.

If the spouse's name is on the deed then it goes to her/him. If not it goes to the spouse and children equally.

In other words, It's heading for the lawyer time. We got this information when we first bought property in Mexico. Your U.S will does NOT cover the situation, so you MUST have a Mexican will for Mexican assets.

When one buys a home in a place like Ajijic, it is not a fair assumption to consider that one has experienced the real estate purchasing experience one would experience in other parts of Mexico without a large number of expat residents and real estate agents catering to that community and well-to-do Tapatios. We bought our home in Ajijic in 2001 using an excellent real estate agent working then for Eager. He was an outstanding agent who, unfortunately later died at quite a young age but he was absolutely professional in every way helping my wife, who then was living in California´s Napa Valley and had no idea what she was facing in buying a Mexican home.

Six years later,we bought another house, this one a foundation - up rehab property in the historic center of San Cristóbal de Las Casas which, as a historic "pueblo magico", has some very strict rules on what you do when rehabiliting a house or any other structure in the designated historic zone including the paint you use and the windows and/or doors you install and they can be damn picky about it to the point they will shut down your project completely if you mess with their proclamations. Most of the readers here don´t really care about a remote place such as Chiapas but here are just a few lessons we learned:
* In much of Mexico, you never want to hire a real estate agent. That is an affectation of places like Lakeside, San Miguel d´Allende, Puerto Vallarta, Cancun and other such places. The way you find a house in a place like San Cristóbal de Las Casas is you walk the streets of the neighborhoods (there call barrios) and look for "Se Vende" signs or, if you spot a house you like, knock on the door and ask of the person who answers if they would like to sell the house. This is not an affront in most of Mexico but be cautious as that person may not actually own the house or may only partially own it so you T MUSTfollow precedures in closing the deal.
* While in places like Ajijic, real estate agents and notaries will advise you to hold a fee simple property jointly, in Chiapas, the notary (remember, we have purposefully excuded real estate agents in that region as they are truly a sorry lot and have nothing to sell anyway) will advise you that the property should be held in only one spouse´s name with the other spouse´s interests protected by a registered will. There are reasons for this having to do with the contractual relationships between spouses and the assertions of property rights upon the death of one or the other but Dawg is not a lawyer so look it up.
* Now the fun part. People in Mexico and a number of other places are known for selling property upon which they do not possess clear title. We bought a ruin in San Cristóbal that needed reconstruction from the foundation up and spent a lot more money rebuilding that ruin than we invested in the actual ruin at inception. It is not an unheard of scam in Mexico to sell a property one actually has no right to sell only to have the "sellers" let you know, after you have reconstructed the property, that they did not convey clean title and, consequently, had to repossess the property for the sake of the family. Watch yo butt and never trust any notary farther than you can spit.
* Finally, my favorite story about the house purchase in San Cristóbal. The woman who actually owned the house through an inheritance, came to the closing - which, for a buyer in Mexicco means the disposition of actual cash, perhaps in an envelope - brought along her "common law" husband. At that meeting held in the presence of the notary closing the deal, she informed us that, in order to close the deal, we needed to deposit this cash into her common law husband´s bank account upon which she was not a signatory and had no legal interests. I shocked the crowd, including the notary, by absolutley refusing to do this. We finally agreed to a compromise under which she agreed to write out a statement to me in Spanish that directed me to deposit the good faith purchase price into the account of her common law husband in which she had no legal ownership. OK, so I did it and it worked out fine but I should have told her to kiss my butt and stormed out of that room.

The law regarding inheritence is the same in France as in Mexico in general. My wife´s widowed French mother does not own the family property; rather she has a life estate in it. She cannot sell it without the permission of her three children who inherited the property, technically speaking, upon her husband´s death. If they gave their permission to sell the property, the sales proceeds would be divided among the children and my wife´s mother would be out in the street unless they took pity on her.

The common good advice here is WATCH YO BUTT in Mexico real estate dealings.
There is absolutely no common ground with U.S. transactions.

No disclosure, no good faith; more shenanigans than a magician. And....no recourse.

When you buy, here's a handy hint: DO NOT let the seller persuade you to show a lower sales price than the actual sales price in order to save him/her capital gains taxes. If they say "everybody does it this way" don't budge.
Otherwise, your taxable chickens will come home to roost when you decide to sell and you'll have taxable egg all over your face.

gringal wrote:The common good advice here is WATCH YO BUTT in Mexico real estate dealings.
There is absolutely no common ground with U.S. transactions.

No disclosure, no good faith; more shenanigans than a magician. And....no recourse.

When you buy, here's a handy hint: DO NOT let the seller persuade you to show a lower sales price than the actual sales price in order to save him/her capital gains taxes. If they say "everybody does it this way" don't budge.
Otherwise, your taxable chickens will come home to roost when you decide to sell and you'll have taxable egg all over your face.

Presumably not if you have a residente permanente. Am I wrong here? Please say no.

Wellspoken, Gringal. People don´t think of these things when the move hrer and buy a house. I have lived in Mexico for 12 years and have matured. I don´t believe anybody but I'm more relaxed now. I now understand Bob Dylans song - The Answer is Blowing in the Wind.

E-Raq: I wish I could say "no" on that one. the answer is probably "it depends". Maybe Intercasa will answer that one.

I can say the same, Dawg: lots of learning experiences, but a sense of Mexican inevitability settles over you after a while. Fate.

E-raq...IF you have residente permanente (used to include FM2 as well)status AND IF you have lived full time in the residence for the last five years AND IF you have not received an exemption on capital gains from the sale of another property within the last five years THEN there is no capital gains.
Keep in mind, that a "specific" amount of land attached to the hourse enters into the equation as well. Anything over that amount is subject to capital gains no matter what. The actual calculation for capital gains is not the simple one that we are used to NOB. IT'S COMPLICATED WITH A NUMBER OF FACTORS THAT HAVE TO BE TAKEN INTO CONSIDERATION.
This information should be confirmed by your Lawyer well in advance of putting your house on the market, so your butt is covered

I believe that Gringal is referring to those who WILL have to pay capital gains...that process is seriously hampered by having a lower purchase value on your deed.

ferret wrote:E-raq...IF you have residente permanente (used to include FM2 as well)status AND IF you have lived full time in the residence for the last five years AND IF you have not received an exemption on capital gains from the sale of another property within the last five years THEN there is no capital gains.
Keep in mind, that a "specific" amount of land attached to the hourse enters into the equation as well. Anything over that amount is subject to capital gains no matter what. The actual calculation for capital gains is not the simple one that we are used to NOB. IT'S COMPLICATED WITH A NUMBER OF FACTORS THAT HAVE TO BE TAKEN INTO CONSIDERATION.
This information should be confirmed by your Lawyer well in advance of putting your house on the market, so your butt is covered

I believe that Gringal is referring to those who WILL have to pay capital gains...that process is seriously hampered by having a lower purchase value on your deed.

O.K. thanks, it's gonna be complicated a bit I can just feel it. Ah well let's just see how all this shakes out.