How to buy a residence in Playa del Carmen as an American or Canadian: step by step

Buying property in Playa del Carmen or in the Riviera Maya and anywhere in the Caribbean of México as a foreigner is with personal cash assets.

Step #1, choose your experienced, knowledgeable, trained broker. Interview and review for longevity and integrity.

Almost all foreign buyers pay from cash assets held or liquidated from their primary residence country. However, there are other options such as developer financing. Mortgages from Mexican banks are not desirable. Call for more on the subject of financing. 

All payments are made via bank transfer. The Mexican government significantly limits cash payments; and cash limits may change from year to year.

Foreign buyers finance with their personal cash assets and collateral in their home country. 

Today, the most common options for a foreigner who wants to buy in Playa del Carmen are:

• Cash, bank-bank transfer, is the method of a vast majority of purchases.
• Developer financing is rare, however the best developers may offer short-to-medium-term financing during promotions.
• Equity loan from a home in the U.S. or Canada (home equity, cash-out refinance, HELOC, etc.)
• If a business investment, constitute a Mexican corporation. That will be a separate discussion.

2. Trust/Fideicomiso for foreign buyers

The trust/fideicomiso method of foreign investors securing “real estate” property 50 kilometers from coastlines and 100 kilometer from international borders was established via a presidential decree in 1971 and the Foreign Investment Law of 1973. Over 50 years and millions of trusts secured and managed.

A Mexican financial institution, almost always a Mexican bank with a trust department, your deed for an annual fee:

• The Mexican bank appears on the deed.
• You are the beneficiary of the trust:
  
  • You hold ALL RIGHTS to use, rent, improve, sell, transfer by inheritance.
  • You may change banks or sell your rights to someone else.
• The typical validity period is 50 years, renewable for another 50 ad infinitum
• Initial expense to constitute the trust is less than USD $2000 which includes the first annual fee.
• The bank annual fee to administer the trust is usually USD $550 and is established at the initiation of the trust.

Millions of trusts holding real estate properties in México have been transferred to other foreign buyers and sold to Mexican national citizens over the past 50+ years. Some have been extended into the next generation!

* Developer financing is rare, but may be your key.

Developer financing is most ofter available in the earliest moths of development, referred to as pre-construction or pre-sale. I prefer the term “pre-delivery” because it designates that the property has not yet been completed. 

A developer may offer plans that are not actually financing after delivery:

• deposit to secure the promissory purchase agreement,
• payments during construction allows you to distribute payments during construction, for example 30/40/30 or 30/60/10, a payment much larger near delivery date is rare. 
• Financing options after delivery, when offered, are more short-term, for example 5 – 7 years. 

Step 3: Choose the property

Please see other stories in the subject under the top menu”Enlighten”.  

Step 4: Negotiation and accepted offer

• Your broker will prepare the offer with specific details for you and the seller to sign.:
  
  • price,
  • method of payment,
  • dates, approximate closing date specified,
  • conditions (e.g., subject to legal review).
  • will a power of attorney be assigned?
• If the seller agrees, a promissory contract / promesa de compraventa is prepared that will include a deposit to pause the property for sale in the market.

Step 5: Due diligence by your lawyer

Your broker coordinates directly with your lawyer:

• that the property is free of mortgages or liens or exceptions,
• that property taxes are current,
•  to search the title in the public registry and review of the condominium regime where applicable,
• that condominium fees are current,
• that condominium rules are acceptable,
• preparation of a power of attorney/poder a favor from someone who will sign on your behalf if planned,
• In the case of pre-construction: permits, licenses and background of the developer.

Step 6: Notary

Your broker chooses and coordinates the work of the notary/notario.

• In Mexico, the notary/notario certifies identities and signatures, collects taxes and fees, and registers the transfer of deed.
• The sale-purchase contract is prepared.
• Receipt of all documentation required by the notary/notario, provided by the lawyer’s due diligence. 

Step 7: Fiduciary. Trust/fideicomiso.

While the notary coordinates the documentation, the trust/fideicomiso is initiated:

• The bank is the trustee.
• The buyer is the beneficiary, one or more.
• The property is the asset.
• Substitute beneficiaries (ie. family).
  
• Registration of a foreign investor in México, a pre-requisite for the Bank trust/fideicomiso.
• Property description, measurements, and associated description of the property physical location.
• an initial cost to constitute the trust is established,
• an annual administration fee is designated.
• The identities of all participants in the transfer of ownership.

Your broker guides the selection of a bank trustee from experience: time, fees, and service.

Step 8: Signatories before the notary/notario

• The purchase contract draft is reviewed for errors or omissions.
• A date for signing at the notary/notaria is scheduled. The approximate closing date had already been specified.
• Power of attorney/poder provided when applicable.
• Taxes, fees, and trust costs are paid before closing may proceed.
• Transfer balance of payments due in advance a few banking days so that the seller will acknowledge by closing date.
• Sign the sale-purchase contract / contracto de compraventa.
• Send the sale-purchase contract to the bank trustee designated with authority to sign the trust/fideicomiso.
• Finally the celebration will begin.
• Your broker coordinates the property delivery:
  
  • inventory review,
  • meter readings,
  • operation of services,
  • name changes in services.

You are the owner/beneficiary through the trust/fideic0miso.

Step 9: Registration

Next:

• The notary/notaria coordinates the signatures of the representatives of the bank trust/fideicomiso.
• The bank trust/fideicomiso is returned to the notary/notaria.
• The notary delivers the complete package of the transfer of ownership to the Public Registry for recording/inscripción.
• Your broker coordinates the department delivery :
  
  • inventory review,
  • operation of services,
  • meter readings,
  • name changes in contracts when applicable.

~ Plan your time

To purchase a residence in Playa del Carmen as an American, Canadian, or foreign buyer:

• Search and selection: as much time as you require to be confident in your choice..
• Offer to purchase through acceptance: 1–2 weeks.
• Promissory sale-purchase contract / promesa de compraventa due diligence: 2-3 weeks. Ask why.
• Registration of a foreign investor in México, a pre-requisite for the Bank trust/fideicomiso: 1-2 weeks.
• Preparation for the bank fiduciary and notary/notario: 1-2-3 weeks, depending on the schedules, holidays, and season.

In total, plan on 2 -3 months after submitting the offer.

~ Specific tips for US and Canadian buyers

• Have your valid passport (check term of validity) and a digital copy of the first photo spread. Flat-bed actual-size only scan. No “smart phone app scans” for any legal document in México. Those scans are not actual size and cannot print actual size.
• Prepare for your international transfers of money with a test in advance (banks, time, commissions).
• If possible, ask your bank representative to authorize an international transfer while you are in México by phone, email, Docusign or other electronic method.
• Talk to your accountant in your country about:
  
  • foreign ownership reporting requirements,
  • foreign rental or other income reporting.
  • receiving money in your home country bank account.
  • if you have a bank account in México.
• Don’t rely solely on social media or advertisements for anything other than entertainment. 
• If something is unclear, ask Gary Martin Wendt, your broker, to explain in English and with examples.
• Sign when you are confident that you understand.

~ Playa Citizen Real Estate, patience learned over 25 years,

If after reading this step-by-step guide it still makes sense to you call Gary +1-281-770-5258. The call is free. Fee-free to represent your purchase in México.

Playa Citizen Real Estate will:

• Review options according to your preferences and budget,
• Guide you through locations and properties by “drive bys” and other virtual and digital means,
• Share detailed knowledge of the cities, specific locations, developers, buildings, and much more.
• Guide estimates and budget,
• Compare pre-sale and resale with clear numbers,
• and coordinate every step though your search, offer, and the legal processes with the lawyer, trust, notary, and scheduling that suits your planning.

When you feel ready to commit with Gary:

• Make a quick list of your questions,
• decide on an approximate investment range,
• and schedule a call with a Gary +1-281-770-5258 to review anything and everything.