We started our lot purchase in March 2006 and we're just about done. It's in Buena Vista on the east cape. The lots that were for sale had to be
subdivided with seperate tax numbers, recorded, etc. We are now getting ready to start the "fideo" process, we are working with a local realtor who is
doing all of the work. We plan to purchase title insurance thru Stewart title. So the big question, is there anything I'm missing here??? Thanks for
the input.DENNIS - 6-27-2007 at 07:22 PM
Prayers never hurt.Al G - 6-27-2007 at 07:39 PM
That is funny to me, but for a guy maybe thinking he is at risk.....Al G - 6-27-2007 at 07:47 PM
"we are working with a local realtor who is doing all of the work. We plan to purchase title insurance thru Stewart title"
I would do some asking around...some leg work...so you are really comfortable with your Realtor doing all the work. I don't don't know more then I
have read here...but there are some not to trustworthy.
Then I would Pray.....
[Edited on 6-28-2007 by Al G]bajafreaks - 6-27-2007 at 07:52 PM
We actually have done alot of checking around, the realtor specializes in title services etc. and we haven't heard anything negative so far.Al G - 6-27-2007 at 08:03 PM
The only other thing I can think of is are you sure you have all rights...Minreal...water etc. I heard Realtor was assigning them to himselfbajalou - 6-27-2007 at 08:27 PM
Al, in Mexico those rights are retained by the Mexican government - never go to landowners.Marie-Rose - 6-27-2007 at 09:30 PM
Welcome to the Nomad board bajafreaks.
Good luck with the purchase. It is such a grueling process and at times I know we wondered if we were doing the right thing. IF you have done
research, research , research... talked to many of the locals before you who have gone thru similiar purchases, you can really not do much more.
When it is all over and you are relaxing in your new home the experience will be worth it!!roundtuit - 6-27-2007 at 09:56 PM
Possibly want to talk to a Nortario. Seems that a Notario ranks above
an attorney, in Mexico. Seems his role is primarily giving legal advice, but he is not allowed toactually represent a client, or advise attorneys who
may be engaged to represent the client. Meet with one in Loreto who dealt primerly in realestate. Very sharp and intelligent...capt. mike - 6-28-2007 at 03:17 AM
wait - i am confused here......you already bought the property but you are just now seeking title ins from Stewart??!!
that's a tad arse backwards buddy, no?longlegsinlapaz - 6-28-2007 at 05:45 AM
capt. mike, if he is just starting the fideicomiso process, then he doesn't OWN the land yet! Actually he said he started the purchase PROCESS in March 2006, but it had to be subdivided, etc., etc., which
is typically a long process, but having it take more than 14 months would toss a red flag out there for ME.
bajafreaks, I'd be asking what problems were encountered in that process. It's possible that the seller wasn't in any rush?? Or possibly there
were/are undisclosed legal problems with the land before it could be sibdivided??? I assume the seller has his down payment, so he's in no rush for
the time being...and the realtor is getting a commission, so he's basically in a conflict of interest position if he's the one who originally
represented the seller in listing the property. Just food for thought.
Questions to ask: Was the land use status changes to Urbano (Urban...which means it can be built on), if so, you need copies of that paperwork &
the receipt. Get copies of the official survey of the subdivision to minimize the possibility of your having to pay for another survey. An
Environmental Impact Study SHOULD have been done for the subdivision, if it was, get copies of that paperwork & the receipt as well...that alone
can save you about $10K(equiv USD) and up to 6 months of delay since you can't touch your property without it having been done...unless you're willing
to pay a $100,000 peso fine!
I realize you're probably in the states, but try to talk with as many people who've bought in the area as possible. They'll be a wealth of
information. Hang on...it can be a wild ride! But well worth it when all the dust settles!Osprey - 6-28-2007 at 05:49 AM
Mike, why would you buy title insurance on property you don't own yet?
Others: what kind of research would you do? How would you do a title search on your own? Who do you trust for realtor references? As to the
notarios: they pretty much know how to prepare the fideo, take the cash, call the valuador, effect the sale, put your name in the big book. They've
done it a thousand times -- just check around to get the best price. THIS IS NOT THE U.S. AND I'M SURE GETTING TIRED OF HEARING "do what you would do
in the U.S."oldhippie - 6-28-2007 at 06:02 AM
Based upon my experiences:
You'll need a FM-3 to get a fideicomiso.
You say you're almost done with the transaction but your just starting the fideicomiso process? Obtaining the fideicomiso IS buying the property. If
you have forked over money and don't have a fideicomiso, hire an attorney now.
If your fideicomiso fees are in dollars make sure that annual increase in fees isn't tied to a peso inflation index. All dollars or all pesos, not a
mix.
Hire an attorney now to read whatever you have signed so far and assist in the fideicomiso. Better late than never and he can represent you when
dealing with the bank about the trust setup. I paid mine $500 and he did a lot of the leg work, was at all meetings with the seller, notario, and the
bank. Very meticulous guy.
I asked him about title insurance and he said I'd spend all my money sueing the title insurance company (Stewert) when they didn't pay the claim. So
that was his cut on title insurance. You should know the best you can the title history of the property.
I'm curious, what are the property taxes in that neck of the woods?Osprey - 6-28-2007 at 06:04 AM
While I'm at it what makes you people think buying realty in Chicago is the very same as buying it in Elephant's Breath, Montana? Giving realty
advise should be left to the realtors I guess --- you could all tell the tale about how you bought your retirement home lot in Baja California and the
Bajafreaks would learn little from the rainbow of differences between the transactions -- who handled them, what it cost, etc. How many of you know
of innocents who bought a piece of such land, lost all the money, didn't get the land?oldhippie - 6-28-2007 at 06:14 AM
One other thing, since you've bought the property, name an alternate primary beneficiary in the fideicomiso in case you buy the farm.oldhippie - 6-28-2007 at 06:24 AM
Quote:
Originally posted by Osprey
Giving realty advise should be left to the realtors I guess
How many of you know of innocents who bought a piece of such land, lost all the money, didn't get the land?
It's my understanding that there are no "realtors" as we know them in Mexico. No licenses, no brokers, no legal responsibility, etc. Be really suspect
of Americans selling real estate in Mexico. They're the biggest thieves because other Americans trust them for some strange reason.
I met a guy one day almost in tears. He had "bought" a beach front lot south of Todos Santos. Turns out the property was in the Federal Maritime Zone
and he couldn't get permits to build. The Cabo San Lucas based "real estate agent" he gave the money to was long gone.DENNIS - 6-28-2007 at 07:45 AM
Oldhippie----
Very true. Your assesment of the credibility factor is right-on.
What puzzles me is that there is no readily available written information on the subject of buying property in Mexico. I know that through
painstaking research, it's all there but, I'm referring to a booklet of comprehensive, understandable laws, rules and steps to be taken in
property purchase. A pamphlet, booklet or book, whatever it takes, should be readily available. Real estate has been changeing hands at a rapid
rate and it remains a mystery mainly because the American buyer doesn't want to believe that this is Mexico and things are different.
There you go, oldcreativeone, a project for you.capitolkat - 6-28-2007 at 10:05 AM
Olhippie
I have a fidecomiso and no FM3. I know lots of folks in the same boat. The Notario asked for and was shown my tourist visa to satisfy his need to know
I was in the country legally. Remember the notario is an agent of the Mexican judicial sytem and the fidecomiso process is part of the Mexican
constitution
I talked to a mortgage broker in La Paz and one of my old contacts at First American Title about buying title insurance and he and she both advised
that there were so many exceptions to the insurance that it was essentially worthless. No one in the business in Mexico , except those selling title
insurance, say its worth much if anything. The fidecomiso supposedly insures the clear title, teh lack of back taxes, and with the thousands of
immigrants buying property in Baja it would be a disaster to find the fidecomiso process is corrupt or delivers anything but clear title.DENNIS - 6-28-2007 at 10:15 AM
Capitolkat ---
You illustrate my point perfectly. Just when someone thinks they know, they don't.
There has to be, or should be a guide which reflects the law.
I've been here long enough to know that the law can be a can of worms and even the lawyers don't know but, I can't help but believe that it can be
clearly presented. Mexico is a mysterious land but, this is too much.oldhippie - 6-28-2007 at 10:31 AM
capitolkat
The Notario and the bank I worked with required a FM-3. Which made sense to me. I'm buying a house, I'm going to reside here, tourist visas don't cut
the mustard.
Perhaps the fideicomisos obtained without one do not conform to law and therefore are invalid. You should look into it. Could be future problems. Like
my mother used to say: "Just because other people jump over Niagara Falls doesn't mean you should." - She was from that area.oldhippie - 6-28-2007 at 10:51 AM
I like this exclusion in the Stewart insurance contracts:
"Any decree, resolution, law, treaty or governmental regulation or restriction (including but not limited to building and zoning laws or regulations
of any federal, state, or municipal government of the United Mexican States) restricting, regulating, prohibiting or relating to:
(a) the occupancy, use, or enjoyment of the Realty"
and on and on
Seems to me they have excluded the biggest risks. Insurance is such a racket.capitolkat - 6-28-2007 at 11:12 AM
If a FM3 was required no one who wanted a vacation home in Mexico could own one through a fidecomiso. I spoke to two attorneys in La paz, the Notario,
had a local who had worked for the local tax office and several realty offices check the facts. None questioned the purchase by someone who was there
on a tourist visa.
Nearly 30 years ago I and several buddies bought land and built a house in Pedregal in CAbo. That was when the fideo process was just underway and
same thing - none of us owners had an FM3 only tourist visas and 15 years ago when we sold everything was fine.toneart - 6-28-2007 at 11:13 AM
When I offer an opinion, it is just that, but it is based on my experience. You can get a fideicomiso with an FMT, but you will lack the protections
that an FM3 would give you in case of a problem. And buying property in Mexico is a virtual land mine. You can take all the right steps as you see
them and still get your feet blown off.
I was told that I need an FM3 for the fideicomiso before I bought my property. Since then, I have known people who bought and obtained fids with
FMTs. You will get opinions for either position, but why take a chance? Get the FM3.
Regarding title insurance with Stewart or any other U.S. Title Insurance company, even if its guarantee is"worthless" when it comes to Mexican law in
practice, your recourse wouldn't be with the real estate company or the Mexican government, it would be with the title company. You have a contract in
the form of an insurance policy. There are many things that can go wrong, but they have to stand behind it. That's why you buy insurance. (We're only
talking about clear title here).oldhippie - 6-28-2007 at 11:25 AM
I understand that Title Insurance is just that - Title. But one of the biggest title issues is a government law distinguishing between Ejidal land and
private land. Does their exculsion nullify a title claim if the title was granted via some incorrect mechanism to Eijdal land?
Isn't that a law restricting occupancy?toneart - 6-28-2007 at 11:34 AM
Quote:
Originally posted by oldhippie
I understand that Title Insurance is just that - Title. But one of the biggest title issues is a government law distinguishing between Ejidal land and
private land. Does their exculsion nullify a title claim if the title was granted via some incorrect mechanism to Eijdal land?
Isn't that a law restricting occupancy?
Your questions regarding title company "exclusions" is one that the title company would have to answer. Good luck with getting a straight answer!
Regarding private land, if title were in dispute by an ejido, the title search would reveal that and therefore wouldn't issue the insurance.oldhippie - 6-28-2007 at 11:52 AM
Thanks toneart, as you can tell I'm very wary of fraudulent insurance. Just to make sure that they didn't issue a policy on ejido land I would have
the exclusion amended to cover what I'm worried about.
You assume the title search will reveal what I'm worried about. Good! Then no problem amending the policy.bajafreaks - 6-28-2007 at 01:21 PM
WOW !!! Thanks very much for all the great feed back. I will look into the FM3 requirement, I've heard both sides as well, need it/don't need it. How
much of a pain is it to get one? and will it need to be done before we start the "fideo" process or can it go hand in hand? You guys are making me
think twice about title insurance? The insurance would of course be on the property and it's valve, but what about once you put a house on it?capitolkat - 6-28-2007 at 01:41 PM
One major consideration in obtaining an FM3 is that within 6 months of activation of the FM you can move household goods to your Mexican residence and
not pay duty. If more than 6 months pass before you move your goods you pay. if you are like me and wanted to buy and plan and then build a home and
the process will eventually take about 2 years I reallllly don't want the FM before it's time-- thus, I made the inquiries about resident status. In
the final analysis the Notario who executes your fidecomiso has the discretion (note I didn't say legal right)to demand an FM and if he signs off
without it you have an interest in your land recognized by the Mexican judicial system and confirmed by the Mexican dept of Interior, and held in
trust by a chartered Mexican bank. Works for me.bajafreaks - 6-28-2007 at 01:54 PM
So it sounds like it's all up to the notario. And yes we don't plan to start building for at least 1-2 years.Iflyfish - 6-28-2007 at 01:56 PM
Keep in mind that lawyers in Mexico are not the same as lawyers in the US. They are not generalists and usually have knowledge of a rather small,
particular area of interest.
My understanding of this process is closest to Osprey's. It is a fluid process. It is in ones interest to have powerful friends involved who know the
local lay of the land and the players involved.
IflyfishPescador - 7-6-2007 at 06:28 AM
It never ceases to amaze me that we all continue to buy property in baja because we love to live there, but it has never been easy nor effecient to do
transactions. The biggest shock is that we probably all enter into the situation expecting things to be somehow related to what we did in the US but
quickly find out that the beauracracy does not function the same in Mexico as we are used to. Now I am sure that the mega developments like Loreto
Bay may make this whole process easier, but I don't want to live there anyway and look at all the fun I had going through the process and all the new
words I learned. I even became more fluent at cussing in Spanish.
I guess it is a lot like having children. You have them when you are young and stupid, when you are older and wiser, you wouldn't even consider the
possibility.
Actually he said he started the purchase PROCESS in March 2006, but it had to be subdivided, etc., etc., which
is typically a long process, but having it take more than 14 months would toss a red flag out there for ME.
