Frequently Asked Questions

Yes, since 1994 Mexico has developed a means to allow foreigners the capability of owning property in their country. If you are not in the "restricted zone", any place 50 kilometers of the shoreline or 100 kilometers of a border, you can hold the title outright. If you are located within the "restricted zone", which all of Cozumel is, you can now own property through a Fideicomiso, or bank trust, like a Fiduciary trust in the US. For a more detailed explanation, please read the entire "Foreigners' Guide to Buying Real Estate in Mexico" in the following link on our web page:

Not necessarily. Each franchise is independently owned and operated. For example, if you have a problem with an office in Cozumel, the home office will quickly tell you that you have to resolve the issue yourself with the independent office. Check carefully. Just because an office has a US franchise name does not mean that you will get better service. Check how many lawsuits the office has against them, how long they have been in business, what kind of experience they have. Buying a US franchised name sometimes, allows non-experienced people to operate, giving a false sense of security to buyers and to sellers who list properties with them to sell.

It may come to a shock to most foreign purchasers, but Mexico is a "cash society". Purchases here are normally paid in cash within 30 to 45 days via a wire transfer to the real estate companies "holding (escrow) account" that is kept in USD dollars. In the past couple of years, Mexico has changed their laws to make it more appealing and safe for US mortgage companies to begin loaning money to purchase properties here. On our web page we have listed some companies that you can check with.

1) Offer contract. To prepare an offer contract, we like to make sure you are a serious buyer. In order to do this, we normally require a check made out to Cozumel Living for $1000 USD. If you did not bring any checks, you can leave a $500 USD cash deposit with us. Since we are dealing internationally, sometimes this can be waived if you promise to immediately enter into a Promise Sale contract once the offer has been accepted. In order to prepare an offer contract, we will put the address of the property into the contract, the amount of the offer, then a breakdown of the down payment with dates it will be made. Then we will list any payments and dates that are planned prior to the final payment, then the date and amount of the final payment. This is when the title is transferred over in front of the notario. In most cases, you should be present for the closing, but if it is not possible, there are ways to handle this through a power of attorney. (See #5 for more information on Powers of Attorneys). We will need your signature on the offer contract, then it is submitted to the seller. At that point, just like in the United States, the seller can either accept or counter on the offer contract. If countered, the offer will be returned to us for you to initial and counter, etc. until an accepted price is agreed upon or the offer is rejected and your offer check or money is then returned to you with the offer becoming null and void. If accepted, we immediately enter into the:

2) Promise Sale contract - This contract is to bind the seller to sell to you and to bind you to purchase from the seller. In this contract, we state the buyers and sellers full name, the entire title information of the property, the meters and boundaries of the property, the total amount of the purchase, the date the 20% down payment will be made, dates and amounts of any intermediary payments if there are any, then the date of the final payment at the closing and signing over of the title. There is a 10% penalty in the contract if the buyer or seller backs out of the contract prior to closing. One half goes to the seller or the buyer and the balance goes to the real estate company. The date of the contract and the signatures of the buyers and sellers are also part of the Promise Sale contract.

Powers of attorneys are done on almost every sale in Mexico. They are very specific powers of attorney generally and can only be used for the specific task stated in the power which is usually only for one specific sale. They are extremely safe and something that is often necessary.

Yes, the contracts are in English. We can now do contracts only in English if it is between English speaking buyers and sellers. Attorneys now will accept English contracts. If a contract has to go to court though, it has to be officially translated by a government translator. If one party is Spanish, then the contract is always done in both languages.

Cozumel Living holds the escrow, but be careful, other real estate companies in Cozumel give the 20% down payment to the sellers and take their commissions immediately. ONLY COZUMEL LIVING HOLDS THE ESCROW UNTIL FINAL SIGNING OVER OF THE TITLE. You can also pay Stewart Title International to hold the escrow, but I have only had two or three people ever do this in my real estate experience.

The trust agreement is drawn up before a notary public (attorney in Mexico). The Ministry of Foreign Affairs and the Commission on Foreign Investments must have approved the operation, with the trustee requesting this authorization. The participants in the transaction are the seller who must have clear title to property, the bank as trustee, and the buyer or beneficiary of the trust or his representative.

You must pay the trust annual fees punctually. Also, you must pay property taxes, water, and other utilities bills when due.

There is a common misconception among foreigners investing in Mexico that once the trust expires, the beneficiary loses all rights and benefits of the sale of the property held in trust. This is not the case. On the contrary, the beneficiary has a contractual right under the trust agreement with the Mexican bank to all benefits that may result from the use or sale of that property, even though he does not hold title to the property. Under Mexican Law, the bank, a trustee, has a fiduciary obligation to respect the rights of the beneficiary.

A real estate trust is not a lease. The beneficiary can instruct the bank to sell or lease the property at any time. The beneficiary can develop and use the property to his linking and benefit, within the provisions of the law. Generally, the law allows most activities engaged in by foreigners.

At the time the trust is set up, a substitute beneficiary is named. This person has the same rights as the first beneficiary in case of his death. No Will need be probated in this case.

Please read "A Foreigner's Guide to Buying Real Estate in Mexico" on our web page: http://www.cozumelliving.com/ForeignersGuide.htm this will explain the entire process. If you have any questions after reading the guide, we will be happy to answer them.

Financing in Mexico is not common practice. Mexico is a cash based society; however, laws have changed in recent years making financing by US companies safer. We have a web page that offers different options:

But, realize that it is not an easy or an inexpensive procedure. We assist in every way possible, but the Mexican banks that the mortgage companies are choosing to mortgage happen to be the hardest to deal with. The bureaucracy is mind boggling making the normal person burnout before the process is accomplished, but as long as you and the seller understand the process, sometimes we can make it happen.

Insurance can be obtained through ING, Banorte Bank, HSBC bank, and many others. It's relatively inexpensive and includes hurricane damage. The best time to purchase insurance in Mexico is November - May or non-hurricane season. If you try to purchase hurricane insurance in June - Oct, you are running into higher costs if you can even purchase it. One important thing to remember in Mexico is that our homes are built of concrete, block, and rebar. Unless you are directly on the ocean they do not blow down and they don't burn down. I know the insurance companies don't want to hear this, but I have never insured my home that is 3 blocks off the ocean. I see no sense in it. I do however insure properties that sit directly on the ocean. Full coverage on $250,000 runs around $750 USD year. In Wilma of course, we filed a lot of claims and the insurance companies paid. It was a bureaucratic filing process but they did pay.

"NOW, WHAT DO LIKE THE BEST AND WHAT DO YOU WANT TO MAKE AN OFFER ON AND IMMEDIATELY GO AND TYPE UP AN OFFER." Maybe I misunderstood the question. Did you mean "can I offer a lower price than the listed price?"

15) Why is closing cost so high?

The title transfer tax imposed by the city is 2% of the stated value of the sale.
The Public Recording taxes are 1% of the stated value of the sale.
Then you have notaries fees which vary by notary. They can be either a flat $2,000 or a percentage of the sale. We will be happy to assist you in getting the lowest cost possible. You can estimate though approximately 6% of the purchase price as your closing costs. This is in total for the trust, the title, the notary: everything.

16) What do the locals think of foreigners living here?

Cozumelenos are easy-going, laid back people who tend to be extremely happy and fun-loving. Their local customs and traditions are kept alive through the generations, even in the face of our changing world. The people of Cozumel, foreign or locals, enjoy the incredible beauty of the island and all its people, in an engaging convivial atmosphere. There is no where else I'd rather live! Join us!