BajaNomad - Selling a property in Mexico

Selling a property in Mexico

DianaT - 8-10-2007 at 11:44 AM

First of all, we have no intentions of selling our Mexican home for a very long time, if ever! However, we like to cover all bases and one never knows what the future will bring. So, here is the question.

We should have our fidiocamiso very soon. Also our FM3s that we obtained in San Diego should be back from La Paz soon. So those items will be covered.

Now, if we needed to sell the property, how does that work? Any information will be appreciated, as always.

Diane and John

Diver - 8-10-2007 at 11:47 AM

Here is a site with a bunch of info on selling and capital gains.

http://www.bajabeachinvestments.com/Selling_Guidelines/page_...

.

Bob and Susan - 8-10-2007 at 12:06 PM

are the field mice pushing you OUT already :lol:

here if you sell
make sure the deposit from the buyer is NOT held by he re guy

if the escrow falls thru that will become his commision
you'll never see it

get a BIG down payment for the offer
there is alot of "buyers remourse"

have your paperwork done before you sell if possible
then cash the check FAST :lol:

Al G - 8-10-2007 at 12:27 PM

Diver thanks great info...
Bob... :lol:

I like you point of view...I know you are right.

Cypress - 8-10-2007 at 12:35 PM

Bob and Susan. Remember the old TV commercial about when E. F. Hutton speaks everybody listens.

I'd pay head to Bob and Susan. :bounce:

DianaT - 8-10-2007 at 01:24 PM

Good site Diver, but it still does not answer some questions.

Any more will be appreciated, including how the fideocamiso is transferred---we were told it is transferable. It is all the paperwork that we wonder about and how the money is transferred, capital gains etc.

Probably should not even think about this because the rules will probably all change before we ever sell.

Now, about those little ole field mice running us out---not a chance!

Diane

I just have to add this.

Lee - 8-10-2007 at 01:26 PM

Quote:

Originally posted by Bob and Susan
here if you sell
make sure the deposit from the buyer is NOT held by he re guy

if the escrow falls thru that will become his commision
you'll never see it

I recognize that this comment is meant to protect the Seller. On the other hand, I would seriously question the need to make sure your ''Agent'' doesn't have access to the deposit -- in the event escrow falls.

If you don't trust your Agent, you are working with the wrong person.

And this comment brings up the question: if escrow were to fall, why does the Seller get to keep the entire deposit? Or is it the discretion of the Seller on how the monies will be divided up?

If a Seller doesn't trust their Agent (a warning here: don't work with someone you don't trust), split the deposit. Agent holds 1/2, and Seller holds 1/2.

Since this would be a non-issue to me, I would trust my Agent to split the deposit with me should escrow fall. There ARE trustworthy Agents in Baja. You just have to sort through those who arent' trustworthy to find them.

Keep looking.

:spingrin:

Bob and Susan - 8-10-2007 at 02:07 PM

lee
its NOT like the states here...

there are NO rules for the realestate people

ethics are NOT part of the process as in the states

have a third party (not involved) hold the money

make sure it's in writing what happens to the deposit
just in case if something "falls thru"

"sh_t happens" :lol:

The Gull - 8-10-2007 at 02:21 PM

Quote:

Originally posted by Cypress
Bob and Susan. Remember the old TV commercial about when E. F. Hutton speaks everybody listens.

I'd pay head to Bob and Susan. :bounce:

Not everyone will listen. For those who don't... the saying: "a fool and his money are quickly parted" would be appropriate.

Diver - 8-10-2007 at 07:26 PM

To sell with your Fido, you move forward as normal with the contract and deposit. Your contract will be conditioned on transfer of title by the bank (Fido). I hear you can even require the buyers to pay the cost of the transfer and all, that way you set/know your net before you deal, less capital gains, of course.
I believe the easiest method is to sign an irrevocable power of attorney over your land (after you get the cash) to the buyer or buyers agent. They take it from there. You pay the capital gains and keep the balance.
.

Al G - 8-10-2007 at 07:48 PM

Quote:

Originally posted by Bob and Susan
lee
its NOT like the states here...

there are NO rules for the realestate people

ethics are NOT part of the process as in the states

have a third party (not involved) hold the money

make sure it's in writing what happens to the deposit
just in case if something "falls thru"

"sh_t happens" :lol:

Your response shows compassion beyond limits...
If someone out there is stupid enough to trust a real estate agent...GOD bless you...

woody with a view - 8-10-2007 at 08:49 PM

Quote:

Originally posted by Al G

Quote:

Your response shows compassion beyond limits...
If someone out there is stupid enough to trust a real estate agent...GOD bless you...

can y'all speak english?

maybe "someday".............................. :?:

I'll say it again. Just my take. Results will vary.

Lee - 8-11-2007 at 02:20 PM

Quote:

Originally posted by Bob and Susan
lee
its NOT like the states here...
there are NO rules for the realestate people
ethics are NOT part of the process as in the states
have a third party (not involved) hold the money
make sure it's in writing what happens to the deposit
just in case if something "falls thru"

I KNOW it's not the states. I recognize there are no RE organizations monitoring Agents in Baja. Granted, ethics in the states exist in a way it doesn't in Baja. An escrow company is a good idea, but not necessary. A contract that is not in writing is a unenforceable contract.

If anybody here doesn't know honest and ethical RE agents, they're out there. You just haven't found them.

Just as there are honest and ethical MX attorneys. It does seem that some have bought into stereotypes.

I know of 2 agents in Todos Santos that I trust like family. If you don't trust your RE Agent explicitly, you are working with the wrong person.

The search for truth

Dave - 8-12-2007 at 09:33 AM

Quote:

Originally posted by Lee
A contract that is not in writing is a unenforceable contract.

Not true. Most litigation stems from verbal agreement.

Quite common, and if you think of it...an underpinning of the Napoleonic code (inquisitorial system).

[Edited on 8-12-2007 by Dave]

JZ - 8-12-2007 at 09:48 AM

Actually it depends on the type of transaction. For some times of transactions oral K's are unenforceable. Real Estate transactions are one example.

Defining ''agreement'' and ''contract''

Lee - 8-12-2007 at 10:04 AM

Quote:

Originally posted by Dave

Quote:

Originally posted by Lee
A contract that is not in writing is a unenforceable contract.

Not true. Most litigation stems from verbal agreement.
Quite common, and if you think of it...an underpinning of the Napoleonic code (inquisitorial system).
[Edited on 8-12-2007 by Dave]

I don't know MX law but would argue that a verbal agreement is NOT a contract. In court, it would then become he said she said.

In the US, and I do know RE law here, a verbal agreement is not a contract and is not enforceable in court.

Anyone entering into a verbal agreement regarding RE in MX is playing a fool's game. I have seen the negative consequences between Todos and Pescadero and, generally, it's the gringo that comes out on the short end.

(I'm guessing there are exceptions to written contracts. Family? I, personally, would have a written contract with family.)

:cool:

Skeet/Loreto - 8-12-2007 at 10:14 AM

I just completed a Sale of Property in Baja Sur, Think it will be my Last Sale of about 20 differant Properties in the past 15 years. It took about 4 months, it was done on the Telephone and Email. No Real Estate Agents involved.
Pineda of Loreto handled the Transaction through Miguel Iszquireda the Notoria #12 of La Paz who handled all of my previous Transcations.
Try not to be in a Hurry, Mexico is slow.

U2u me if you need any Help.

Skeet/Loreto

[Edited on 9-11-2007 by Skeet/Loreto]

The court determines what verbal agreement "is".

Dave - 8-12-2007 at 10:30 AM

Quote:

Originally posted by Lee
I don't know MX law but would argue that a verbal agreement is NOT a contract. In court, it would then become he said she said.

I know of instances where verbal agreement, even divined intent overruled written contract.

Phil S - 8-12-2007 at 08:39 PM

Know of a sale of a home recently completed in Loreto area. Buyer purchased putting home into a Mexican Corp. That required cancelling the fidiocomiso. Was handled by a notorio out of LaPaz. It required two appraisals. One for at the time of sale, and one estimating the value at the time the seller had purchased. I believe the capital gains ended up being $28,???.00 And the notorial collects the tax money or it won't close.
People are telling me that the capital gains runs about 30% Anyone know for sure how that is figured????

[Edited on 8-13-2007 by Phil S]

Dave - 8-12-2007 at 09:34 PM

Quote:

Originally posted by Phil S
People are telling me that the capital gains runs about 30% Anyone know for sure how that is figured????

Unless the seller can prove resident taxpayer status it's 35%- less original cost, improvements and cost of sale.

Diver - 8-12-2007 at 09:40 PM

CAPITAL GAINS TAX

Capital gains tax law in Mexico states that tax is owed on the profit you receive when you sell your home or property. By law, you have two options when it comes to capital gains, and you can use whichever is the better of the two options for you.

Option 1: 30 percent of the net profit. (There are a variety of deductions included in this option.)
Option 2: 25 percent of the gross sales amount with no deductions.
(Percentages reflect the 2005 Tax Code)

Although a 30 percent capital gains tax may seem high, Mexico does have several laws and procedures that will assist you in maximizing your cost basis, thereby reducing your net profit, and thus lowering your capital gains. The key is to understand these laws before you buy, not when you decide to sell.

Dave - 8-13-2007 at 08:04 PM

Quote:

Originally posted by lencho

Quote:

Originally posted by Dave
Unless the seller can prove resident taxpayer status

Resident taxpayer? What does that taxpayer part mean?

--Larry

To qualify for homestead exemption and no cap gains.

Diver - 8-13-2007 at 09:36 PM

Just like in the US - 2 years no capital gains for your principal residence.
Here is a site I found full of good info.

http://www.mexconnect.com/mex_/travel/rrwalters/rrwtaxes.htm...

Dave - 8-13-2007 at 10:12 PM

Quote:

Originally posted by lencho

Quote:

Originally posted by Dave
To qualify for homestead exemption and no cap gains.

Oh, I understand what it's for in this context, what I don't understand is what is meant by "taxpayer." Anyone that consumes stuff here pays IVA. Homeowners (well, Fide holders for the foreigners) pay property taxes. If one has a Mexican-registered vehicle, he's paying taxes with the tenencia. Some of us pay business or income tax. So what do you mean by "taxpayer"?

--Larry

The key word is resident. Derive more than 50% of your income and primary residence is located in Mexico. Fm2 vs FM3, etc. Some of the supposed requirements to be treated as a resident taxpayer. In reality, you are what the notario declares you to be...regardless of qualification. It pays to "shop around".

BTW, there is no longer a 2yr requirement. Qualifiers instead.

oldhippie - 8-14-2007 at 06:32 AM

Quote:

Originally posted by Dave

Quote:

Originally posted by lencho

Quote:

Originally posted by Dave
To qualify for homestead exemption and no cap gains.

BTW, there is no longer a 2yr requirement. Qualifiers instead.

"In reality, you are what the notario declares you to be...regardless of qualification."

When I was buying my place, after signing the final papers in the Notario's office, we were chatting and I mentioned that the capital gains taxes upon sale were high. He said not to worry, "there are ways", and he would take care of me.

Also, I had such a positive experience hiring a local real estate attorney to handle the purchase, I'll certainly do the same if I sell. I imagine they know "the ways".

He made it so easy and really looked out for my interests. Even after his fee my costs were less because he helped me negotiate with the seller for seller paid changes to the house. He even got the bank to change some parts of the boilerplate fideicomiso I didn't like. Specifically, fees stated in dollars and the annual escalation of fees tied to inflation of the peso. It's all stated in pesos now.

[Edited on 8-14-2007 by oldhippie]

Sackmaster - 8-21-2007 at 02:48 PM

Quote:

Originally posted by jdtrotter
First of all, we have no intentions of selling our Mexican home for a very long time, if ever! However, we like to cover all bases and one never knows what the future will bring. So, here is the question.

We should have our fidiocamiso very soon. Also our FM3s that we obtained in San Diego should be back from La Paz soon. So those items will be covered.

Now, if we needed to sell the property, how does that work? Any information will be appreciated, as always.

You need not just any lawyer, but the best lawyer in town. There is one in TJ/Baja who has the reputation for being the best. KUSI San Diego's Micheal Turko did a 2 or 3 part series on how to buy and sell property in Mexico without getting ripped off. Turko mentioned the lawyers name and interviewed him in his broadcast. Go use KUSI's search engine to find the lawyers name. This lawyer practices in both Mexico and the U.S.