Due diligences

During the due diligence period, you have the opportunity to thoroughly review various documents related to the property and assess its suitability for your needs. This period also allows for additional activities such as construction inspections and obtaining financing, if applicable. The purpose of this period is to enable you to gather all the necessary information and make an informed decision about proceeding with the transaction. Here are some key points regarding the due diligence period:

Reviewing Documents: You will have the chance to carefully review documents such as property titles, surveys, zoning regulations, property tax records, and any other relevant paperwork related to the property. This will help you gain a comprehensive understanding of the property's legal status and potential obligations.
Construction Inspections: If desired, you can conduct inspections of the property to assess its physical condition and identify any potential issues or necessary repairs. This step is particularly important for ensuring that the property meets your expectations and is in good condition.
Financing Contingency: If obtaining financing is a contingency for the purchase, you can utilize this period to secure financing options and assess the feasibility of obtaining a loan for the property.
Comfort and Decision-Making: Throughout the due diligence period, you should evaluate all the information gathered, including document reviews, inspection results, and financing considerations. This evaluation allows you to determine whether you are comfortable moving forward with the transaction or if you have concerns that may prompt you to reconsider.
Timeframe: The typical due diligence period is 15 days, although it may be longer for commercial properties or more complex transactions. This timeframe provides sufficient opportunity for thorough evaluation and decision-making.
No Obligation or Penalty: At the end of the due diligence period, you have the option to proceed with the purchase if you are satisfied with the results of your assessments. Alternatively, if you decide against the purchase, you can withdraw from the transaction with no obligation or penalty.

It is crucial to use the due diligence period wisely, taking advantage of the opportunity to gather information, evaluate the property, and make an informed decision. If you have any questions or require additional assistance during this period.

Where do I transfer the money from the purchase-sale transaction?

When purchasing a property in Mexico, it is common practice for the buyer to open an escrow account as part of the transaction process. Here's an overview of the escrow process in Mexico:

Good Faith Deposit: As a buyer, it is customary to make a good faith deposit into the escrow account. This deposit is typically equivalent to 10% of the agreed-upon purchase price. The purpose of this deposit is to demonstrate the buyer's serious intent to proceed with the transaction.
Escrow Holder: In Mexico, well-recognized title companies are often chosen to act as the escrow holder. These title companies have the expertise and infrastructure to securely hold the funds and facilitate the closing process.
Escrow Fees: The cost associated with opening and maintaining the escrow account is typically around $750.00 USD. This fee covers the administrative and custodial services provided by the title company.
Finalizing the Purchase: A few days before the closing date, the buyer is required to deposit the remaining balance of the purchase funds into the escrow account. These funds will be held securely by the escrow holder until the closing date.
Closing Process: On the closing date, once all necessary conditions and requirements are satisfied, the seller will transfer the title of the property to the buyer. The funds held in escrow will be disbursed to the seller as part of the closing process.

By using an escrow account, both the buyer and seller can have confidence in the secure handling of funds and the orderly completion of the transaction. The escrow process provides protection and assurance to all parties involved.

It's important to note that specific escrow procedures and fees may vary depending on the location and the chosen title company. Working with experienced professionals familiar with the local regulations and practices is crucial to ensure a smooth and successful escrow process.

What next once the escrow is opened and the contingencies are eliminated?

It signifies an important milestone in the closing process of the property transaction. Here's what it typically means:

Deposit and Satisfaction: The buyer has fulfilled their obligation to deposit the required 10% good faith deposit into the escrow account. This deposit demonstrates the buyer's commitment to proceed with the transaction. Additionally, the buyer has completed their due diligence and is satisfied with the results, leading to the removal of contractual contingencies.
Moving Forward to Closing: With contingencies removed and the escrow deposit secured, the transaction is set to proceed towards the closing stage. This indicates that both the buyer and seller are committed to finalizing the sale.
Coordination with the Notary: At this stage, your Realtor works closely with the notary to coordinate all aspects of the closing process. The notary is a legal professional responsible for ensuring that the transaction adheres to all legal requirements and formalities.
Buyer's Presence at Closing: Whether you need to be present at the closing or not depends on the specific circumstances and legal requirements of the jurisdiction. In some cases, your presence may be required, while in others, you have the option to grant a power of attorney to someone you trust. This authorized person can attend the closing on your behalf and sign the necessary documents.

It's essential to consult with your real estate agent and legal advisor to understand the specific requirements and options for your situation. They can provide guidance on whether your presence is necessary at the closing and assist you in making the appropriate arrangements, such as granting a power of attorney if applicable.

Remember to communicate your preferences and consult the relevant professionals to ensure a smooth and well-coordinated closing process.

How to prepare for the closing and take ownership of the property?

There are several important steps and considerations to keep in mind:

Financial Preparation: Ensure that you have the necessary funds available to cover the remaining balance of the purchase price and any closing costs or fees associated with the transaction. This includes being prepared to assume payment for bills and expenses related to the property once the closing has taken place.
Proration Statement: Your real estate agent will provide you with a proration statement prior to closing. This statement outlines the expenses that were prepaid by the seller and must be reimbursed by you at the closing, if applicable. It helps ensure a fair distribution of financial responsibilities between the buyer and seller.
Coordinate with Service Providers: Contact utility companies, such as water, electricity, and gas, to transfer the services into your name as of the closing date. This ensures a smooth transition and avoids any interruption of essential services.
Property Insurance: Arrange for property insurance coverage to protect your investment.
Legal Documentation: Work closely with your real estate agent and legal advisor to ensure all necessary legal documentation is prepared and signed correctly. This includes reviewing and signing the purchase agreement, transfer of title documents, and any additional paperwork required by local laws and regulations.
Closing Appointment: your real estate agent and the notary will coordinate with you to schedule the closing appointment. Ensuring that all parties involved, including yourself, the seller, and any necessary representatives, are available on the agreed-upon date and time.
Closing Funds: Prepare the required funds for the closing, including the remaining balance of the purchase price, closing costs, and any other fees or expenses. Coordinate with the escrow holder or the designated party to ensure a smooth transfer of funds.
Final Walkthrough: Before the closing, schedule a final walkthrough of the property to verify its condition and ensure that any agreed-upon repairs or modifications have been completed satisfactorily.

By completing these steps and staying organized throughout the closing process, you can ensure a smooth transition of ownership and assume the responsibilities associated with the property effectively.

Your real estate agency will guide you through the specific requirements and provide assistance at each stage of the closing process.

Congratulations on reaching the closing date!

It's an exciting milestone in the property purchase process. Here's what you can expect during this final stage:

Setting the Closing Time: The closing time will be determined by the Notary office in coordination with the schedules of both the buyer and seller. The Notary will take into account their workload and availability to find a suitable time for the closing.
Walk-Through of the Property: Up to three days prior to the closing, it is customary for the buyer to conduct a walk-through of the property. This is an opportunity to ensure that everything is in place as agreed upon, and that any repairs or modifications requested during the negotiation phase have been completed satisfactorily. If any concerns or issues arise during the walk-through, they can be addressed before the closing takes place.
Payment of Funds: During the closing, you will be required to provide the necessary funds to complete the purchase. This includes the remaining balance of the purchase price, closing costs, and any other fees or expenses. The exact payment procedure will be communicated by the Notary or the designated party responsible for handling the financial aspects of the closing.
Reviewing and Signing Documents: The Notary will present the relevant documents for your review and signature. These may include the deed of sale, transfer of title documents, tax declarations, and any other legal paperwork required to formalize the transaction. It's important to carefully review each document and seek clarification on any terms or provisions that you may not fully understand.
Distribution of Documents and Funds: Once all the necessary documents have been reviewed and signed, and the financial obligations have been fulfilled, the Notary will oversee the distribution of the documents and funds. This includes providing you with copies of the signed documents and ensuring that the seller receives the agreed-upon payment for the property.
Funds Disbursement: Once all the documents have been signed and reviewed, the Notary will send the disbursement instructions to the escrow. The escrow will then release the funds to the appropriate parties, including the seller. This is usually done through a secure and authorized financial transaction.
Receiving the Keys: As the closing is complete, you will receive the keys to the property from the seller. This signifies the official transfer of ownership, and you can now take possession of the property.
Final Recorded "Escritura" (Deed): The Notary will proceed with the necessary steps to record the deed and make it an official part of the public records. This process typically takes about six months to complete. However, the Notary will provide you with a copy of the deed for your records in the meantime. This copy serves as proof of your ownership while you wait for the final recorded deed.

By following the guidance of the Notary and cooperating with all parties involved, the closing process can proceed smoothly and efficiently. Be prepared to spend sufficient time at the Notary office to complete all necessary procedures and ensure that you have all the required documents and funds ready.

Enjoy the satisfaction of completing the closing process and taking ownership of your new property.