San Miguel de Allende Real Estate: Purchasing a Home
San Miguel de Allende has become a very talked about place and frequently is featured in publications such as Condé Nast as one of the best cities in the world to live and visit. Many visitors arrive with questions about San Miguel de Allende real estate and what is required to purchase property here. The process of purchasing property in Mexico is fairly simple but you shouldn’t proceed without professional guidance to walk you through the process.
Can foreigners own property in Mexico?
Yes, with some restrictions. If you intend to purchase within 31 miles of the coast or 62 miles of a foreign border you will need to do so through a trust with a Mexican bank. These bank trusts are fairly easy to establish and provide the buyer with the security of ownership and protection of Mexican law. If your intention is to purchase property outside of the restricted zones, it is possible to hold the title in your own name without a bank trust.
What is the process to purchase property in San Miguel de Allende?
We strongly recommend you work with a reputable realtor who is also a member of AMPI (Mexican Association of Professional Realtors). We think Ernesto and Glenn real estate team is, of course, your best option, but you will need to select someone you are comfortable working with and trust. Your agent will help you search for properties on the market that meet your requirements and once you’ve found your dream property, your agent will prepare an offer to buy. After negotiating a price and details for closing are agreed upon, a buy-sell contract should be drafted by your agent/broker.
Foreigners buying property in Mexico will require a special permit issued by the Mexican Ministry of Foreign Relations (SRE). There is no cost for the permit itself, however, you can expect to pay around $400 US per person in processing and courier fees as the permit is processed in Mexico City. It usually takes 5 business days to get this document in place and the permit is valid for 6 months.
The buy-sell contract is a legally binding version of the Offer to Buy. A penalty clause will be included in the contract in case either party defaults.
At the signing of the Buy-Sell Contract, the buyer makes a deposit that usually corresponds to 10% of the purchase price. The best way to do this is for the buyer and seller to open an escrow account to assure the security of both parties. The cost of escrow is shared equally between the buyer and seller and currently runs $600 US.
We recommend having an inspection of the property for possible structural, electrical and plumbing damages to avoid surprises.
Closing takes place with a Notario (a special type of attorney) where the buyer and seller will sign the Escritura (Title Deed). All closing costs, with the exception of Capital Gains Tax if applicable, are paid by the buyer.
The Notario’s service includes:
- Ordering an appraisal of the property
- Notifying the public registry that the property is under contract
- Issuing a preventive notice (works like a lien on the property to prevent the owner from encumbering or selling the property in any way)
- Performs a Title Search, up to ten years past, to verify that it has no liens
- Gets your SRE (permission to buy)
- Drafts the deed and attests to its signing
- Submits a definitive notice to the public registry and registers the deed
- Retains taxes and pays them to the government on behalf of the parties
After the Escritura is signed and once the Notario receives proof of payment, or if an Escrow Account is open, the Notario will proceed to register the Escritura at the Public Property Registry. The new owners will receive the final registered document approximately six weeks after closing (the actual Escritura never leaves the Notary’s office).
I hope this description of the buying process helps answer some questions as you consider property for sale in San Miguel de Allende and whether purchasing is right for you. Please don’t hesitate to contact us for more information or with questions.