BajaNomad

"Closing costs" in Mexico

Hook - 10-16-2006 at 01:24 PM

I recently inquired about some property on the mainland of Mexico. When I asked about fees above and beyond the purchase price, the realtor told me that assuming the existing trust would be about 2000.00 and that in addition to the cost of the trust that ".....your closing costs are about 6% of the price that is valued on the property in the trust."

Six percent?????? And I would not even be financing the purchase??? Is this customary? What is this for?

I am not above asking the R.E. agent but I want some background info first.

Al G - 10-16-2006 at 01:27 PM

Hook...It is called lining the pocket of the realtor. That is what it is for in the US.

Hook - 10-16-2006 at 01:40 PM

Quote:
Originally posted by Al G
Hook...It is called lining the pocket of the realtor. That is what it is for in the US.


As the buyer, I shouldn't be paying for the agent's fees, at least not DIRECTLY.

Al G - 10-16-2006 at 01:54 PM

I thought Mexico had this "buyer pays all" deal.

oxxo - 10-16-2006 at 01:56 PM

Since I just purchased property in Mexico, I can shed some light on this.

Whenever you purchase a property, you, the buyer, are required to pay a 2% acquisition tax to the Mexican Government. In addition I paid approximately 2% of the cost to the attorney/notario/translator/bank trustee for processing the paperwork and fideicomiso. This comes out to 4% of the property cost. If the cost of the property is comparatively lower priced, then costs could go up to 6% to 8% because the attorney/notario/translator/bank trustee have certain fixed costs. Conversely, if you purchase a higher priced property costs could go down to maybe 3%

This was my share of the fees. The seller also had fees that included a commission to the realtor which was 6% of the sale plus additional legal fees for terminating his fideicomiso.

Depending on what you are buying, 6% for your costs does not sound out of line. Things are different here in Mexico! :bounce:

aldosalato - 10-16-2006 at 02:00 PM

closing costs aprox are as follow for a 200k property
300 appraise, certificate No liens, certificate No due taxes
2,300 USD New Bank Fideicomiso including first year bank fee
4,000 USD 2% acquisition tax
1,200 USD Notary (minimum is USD 900 + 0.15% aprox)
600 USD Public Registry and County Registration

8,400 TOTAL

This is the straight cost of buying a 200k property.

Realtors, Lawyers, Settlement companies, title insurances etc etc are all extra costs that depend a lot on who you are dealing with

Bruce R Leech - 10-16-2006 at 02:53 PM

you are all correct and you are all wrong. I am getting ready to close on a house in Ensenada and I checked it out with one Notary and was told about 5000 dollars. not being a happy camper I went across the street to another Notary and was given a 2000 dollar total cost.


Shop around unless you have money to through around. and in that case come to me and I will do it for you for 10,000:yes:

Hook - 10-16-2006 at 03:04 PM

Quote:
Originally posted by aldosalato
closing costs aprox are as follow for a 200k property
300 appraise, certificate No liens, certificate No due taxes
2,300 USD New Bank Fideicomiso including first year bank fee
4,000 USD 2% acquisition tax
1,200 USD Notary (minimum is USD 900 + 0.15% aprox)
600 USD Public Registry and County Registration

8,400 TOTAL

This is the straight cost of buying a 200k property.

Realtors, Lawyers, Settlement companies, title insurances etc etc are all extra costs that depend a lot on who you are dealing with


So Aldo, the amount you're showing me amounts to around 4% total. My understanding is that a lawyer doesnt necessarily have to get involved with this, only a notario, correct?

Also, the realtor talked about "assuming" the existing bank trust. Any savings or advantages to doing this?

aldosalato - 10-16-2006 at 04:31 PM

Taking over an existing Fideicomiso should be a little bit cheaper..........probably you can save 800 USD.

If the property were in La Paz municipality I would charge a fee of 500 USD to follow up the whole process for a transfer of an existing Fideicomiso. That would add up to a total of 8,900 USD.
A new Fideicomiso I usually charge charge 700-1,000 USD.

Bruce R Leech - 10-16-2006 at 04:33 PM

shop around:light:

Cypress - 10-16-2006 at 04:46 PM

Closing the coasts! Say it ain't so!:?::tumble:

aldosalato - 10-16-2006 at 06:17 PM

In La Paz all Notarios charge almost same since they have a cartel in place with agreed prices
So much for free market in a feudal system..........
Anyway in the States and all around the world it is a total rip-off to buy or sell properties (nowadays at inflated prices). Fixed costs, high expenses and plenty of taxes with different names. Between buying and selling a property you lost about 10% thanks to the system. So much for your nest egg store of value.

Bruce R Leech - 10-16-2006 at 06:21 PM

Quote:
Originally posted by Al G
I thought Mexico had this "buyer pays all" deal.



this is something you negotiate at the time of sail their is no set way. here in Mulege it used to be that the buyer paid all of the notary service but that has changed.

modhatter - 10-17-2006 at 09:15 AM

Bruce, Curious as to what Notoria quoted you $2,000. I am assuming that is for his fee alone? I purchased a house in Ensenada recently. When I went to the Notorio's office, I asked for a breakdown of all of my closing colsts on purchasing the house (Cost $162,000) I was given a small piece of paper from a small calculator with a bunch of numbers on it. All totaling $6,600 (US) There was no writing on this chit of paper - only numbers.

She would only tell me "verbally" what each one of those numbers were for. However, when I went to the closing, may ACTUAL closing costs came to over $10,000. Then to make matters worse, after I thougtht the Trust was completed (as it was supposed to be BEFORE the closing), I got word from my friend who lives there, that they made a mistake and I need to give them $1,600 more to pay the Bank their Trust fees, and simultaniously learned the Trust had not even been completd. (Still isn't )

So my closing costs (THUS FAR) on a $162,000 house have come to near $12,000. So a word of caution, just because they tell you something or hand you a chit of paper with no writing on it, don't for a momment assume it a fact. I would not hesitate to say that the Notorio that I went to was crooked. I read about a month ago on Mexico connect a published article on Closing Costs in Mexico. I can tell you, if the Notorio went by what they are supposed to be by law, it would have cost me only about $4,000.

We in the US tend to take for granted when some legal entity quotes us costs that we can assume they are correct and lagitimate. This is not the case in Mexico. My advise to you Bruce is to go back to the Notorio, and see if you can get them to put the closing costs on paper for you. (and not a calculator chit of paper)

Bruce R Leech - 10-17-2006 at 09:42 AM

Quote:
Originally posted by modhatter
Bruce, Curious as to what Notoria quoted you $2,000. I am assuming that is for his fee alone? I purchased a house in Ensenada recently. When I went to the Notorio's office, I asked for a breakdown of all of my closing colsts on purchasing the house (Cost $162,000) I was given a small piece of paper from a small calculator with a bunch of numbers on it. All totaling $6,600 (US) There was no writing on this chit of paper - only numbers.

She would only tell me "verbally" what each one of those numbers were for. However, when I went to the closing, may ACTUAL closing costs came to over $10,000. Then to make matters worse, after I thougtht the Trust was completed (as it was supposed to be BEFORE the closing), I got word from my friend who lives there, that they made a mistake and I need to give them $1,600 more to pay the Bank their Trust fees, and simultaniously learned the Trust had not even been completd. (Still isn't )

So my closing costs (THUS FAR) on a $162,000 house have come to near $12,000. So a word of caution, just because they tell you something or hand you a chit of paper with no writing on it, don't for a momment assume it a fact. I would not hesitate to say that the Notorio that I went to was crooked. I read about a month ago on Mexico connect a published article on Closing Costs in Mexico. I can tell you, if the Notorio went by what they are supposed to be by law, it would have cost me only about $4,000.

We in the US tend to take for granted when some legal entity quotes us costs that we can assume they are correct and lagitimate. This is not the case in Mexico. My advise to you Bruce is to go back to the Notorio, and see if you can get them to put the closing costs on paper for you. (and not a calculator chit of paper)


that is for all costs and taxes to close on a 100,000 dollar house.

shop around

comitan - 10-17-2006 at 09:44 AM

Bruce are those costs for a Fidocomiso or Mexican title.

Bruce R Leech - 10-17-2006 at 10:21 AM

Quote:
Originally posted by comitan
Bruce are those costs for a Fidocomiso or Mexican title.


Mexican title.

Hook - 10-17-2006 at 11:31 AM

Much good info here.

Aldo, what would the typical annual fees be on a fideicomiso? If the amount is dependent upon the purchase price of the house, then let's say that the house is purchased for 200,000.

Does this annual fee vary from bank to bank? Is there one in Mexico that is consistently less expensive?

[Edited on 10-17-2006 by Hook]

Cypress - 10-17-2006 at 12:12 PM

Looks like there's a "hidden cost" of from 5 to 10 percent when making a real estate purchase south of the border.:light:

comitan - 10-17-2006 at 12:28 PM

Cypress

There is no hidden cost (if) you have a reputable Real estate person. The Notario's are reputable (I Think) but they charge different amounts for there service. Aldo says here in La Paz they are the same, as most Banks are very close on what they charge, they usually give you at least 2 alternative on Cost of living increases, ours is I believe 10% increase every 5 years. Started at $350.00 after 10 years $362.00.

Cypress - 10-17-2006 at 12:39 PM

Thanks for the info comitan.:D

comitan - 10-17-2006 at 01:01 PM

No its in dollars and when you pay its converted to pesos. I did look back and it was $300.00 originaly now its 363.00.

Hook - 10-17-2006 at 01:20 PM

Quote:
Originally posted by comitan
No its in dollars and when you pay its converted to pesos. I did look back and it was $300.00 originaly now its 363.00.


Are you talking about the increase of your annual maintenance fees for the fideicomiso, i.e., bank trust, Comitan? So, your annual fideicomiso fees started out at 300.00US?

comitan - 10-17-2006 at 01:40 PM

Yes but that was 12 years ago.

modhatter - 10-17-2006 at 02:33 PM

My first year fee is $550 a year with Scotia Bank.