ESCROW, TITLE INSURANCE, AND HOME INSURANCE SEARCH
It is the Real Estate Company who traditionally in effect, acts as a "Holding Agent" for the involved parties, similar to Canada. This is still a common practice. There are risks involved in that, as you can imagine. In recent years we have seen the use of third party escrow services in the Riviera Maya. They offer full escrow, title searches, and closing services.
To find the required property, be it for lease or for purchase, it is advisable to contact a reputable real estate company. Otherwise, you could get caught in the nightmare of people taking money and not having a legitimate title. A reputable real estate company checks all of this out for you and ensures you will get a good, clear title with no nightmares.
C. PURCHASE-SALE PROCESS
Most real estate transactions are "opened" after a written purchase offer is accepted by the seller and when a purchase-sale agreement (promissory contract) is signed by both parties. In most cases, a deposit is required by the broker in order to transmit the offer to the seller. If the transaction is being conducted directly with the seller, it is highly recommended that a real estate broker or a lawyer be consulted before signing any papers or handing over any money.
In some areas it is common practice to deliver to the seller, directly. While that was the common practice before, now we use third-party escrow as an assurance to both parties to protect the funds and the transaction. A deposit is usually paid at the signature of the purchase contract equivalent to 20-50%, of the total price. A purchase contract usually contains a penalty clause applicable to either party in case there is a breach of contract. When it is time to sign the escritura or official deed, it must be certified by a Notario Publico. At that time, the balance is paid and the property is delivered. This usually takes more than 45 days.
NOTARIO PUBLICO OR NOTARY PUBLIC
The Notario Publico is a government-appointed lawyer who processes and certifies all real estate transactions, including the drawing and review of all real estate closing documents, thus ensuring their proper transfer. Furthermore, all powers of attorney, the formation of corporations, wills, official witnessing, etc. are handled and duly registered through the office of the Notario Publico, who is also responsible to the government for the collection of all taxes involved.
In connection to real estate transactions, the Notario Publico, upon request, receives the following official documents, which, by law, are required for any transfer:
A non-lien certificate known as a “Libertad de Gravamen” from the Public Property Registry based on a complete title search.
A statement from the Treasury of Municipality regarding property assessments, water bills, and other pertinent taxes that might be due or copies of the latest utility receipts. - An appraisal of the property for tax purposes.
It is common practice that the buyer pays the transfer or acquisition tax as well as all other closing costs including the Notario fees and expenses, and the seller, pays his capital gains tax and the broker’s commission.
Since January 1, 2020, the state of Quintana Roo applies a 3% real estate transfer tax. This transfer tax plus the rest of the closing costs vary from 6-8% % of the purchase price.
COST OF THE FIDEICOMISO
Based on a present tariff, the bank charges the person desiring the Fideicomiso an initial fee for the permit and for drawing up of the agreement and establishment of the trust, plus a percentage according to the value of the property. In addition, the bank charges an annual fee (approximately $800 US) to cover its annual services as a trustee.
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USA 1 760 994 1716; Canada 1-604-628-7247
Mexican cel + 52 984 116 3251
Judi Shaw, Realtor ®