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Buying Mexican Property? Watch Out for Scams
Information for Buyers
(April 18, 2006) -- Baby boomers seeking a warm climate and affordable retirement home are fueling a real estate boom in Mexico's Yucatan peninsula. But with that boom has come higher prices and an increase in scams.
In some cases, con artists try to flip property they don't even own.
"In Mexico, you can buy safely but you've got to do your homework," says David Wiesley, president of FirstMexico Group LLC, San Diego, and a pioneer in the Mexican title-insurance business.
Anyone contemplating buying real estate in Mexico should take a few initial steps before handing over cash in any amount.
- Ensure the title is clear. Ask the seller to provide a copy of the title, known informally in Spanish as an escritura, and a certificate of freedom of liens and encumbrances. Also, make sure you see the latest tax statement for the property.
- Hire a reputable Mexican attorney. The nearest U.S. consulate can provide a list of attorneys in good standing.
- Arrange for title insurance. A title insurer will protect a buyer against prior liens by tax authorities in the event that somebody else claims title.
- Place the property in a fideicomiso or trust. This costs about $400 per year, but that is offset by the very low property-tax burden.
Source: The Wall Street Journal, Michael Allen (06/18/2006)
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