January 23, 2019 |
For many, buying a second home in a foreign country can be an intimidating process. From language barriers to local ownership laws and tax codes, there is a lot of information to digest. In order to put your mind at ease, Ruben Vargas, Sales Executive at Querencia, answers some frequently asked questions about purchasing a second home in Cabo.
What’s the difference between “Cabo,” and “Los Cabos”?
Los Cabos, generally referred to as “Cabo,” is a municipality on the southern tip of Mexico’s Baja California Peninsula. The area is known for its temperate annual average temperature and wide array of outdoor activities. Los Cabos is divided into two towns: Cabo San Lucas (a tourist-friendly town with hotels and nightlife) and San Jose Del Cabo (the city seat that features more historic areas, art district, and fine dining).
Why is Cabo such a popular destination for U.S. and Canadian buyers?
In recent years, Cabo has undergone transformations in infrastructure to attract discerning buyers from around the world. The Los Cabos International Airport hosts roundtrip flights from many North American cities, meaning the region is easily accessible within a few hours or less. Improvements to roads, telecommunications, medical facilities, entertainment, and dining have also contributed to the area becoming a well-balanced community.
How would you describe the luxury real estate market in Cabo right now? Does it favor buyers or sellers?
It’s a very active market right now. Buyers are flocking to the region for a year-round vacation home and there are a number of high-end turnkey and customizable options available. The market still favors those buyers. In addition to newer properties, there are slightly older homes or condos that still offer great value.
Do I need a real estate agent or broker to buy property?
We advise that buyers work through a real estate agent with regional experience, because of the various particularities of Mexican property law. They can be tricky to navigate alone, and a liaison can walk you through the process step by step to ensure a smooth experience.
What is a fideicomiso?
Mexico grants foreigners the right to purchase real estate within 30 miles of the coast. This ownership is permitted through a land trust called a “fideicomiso”. This is a trust agreement with a Mexican bank that is the safest, most secure way to hold real estate. The bank acts on your behalf in transactions, while the buyer holds exclusive rights to sell, will, lease, rent or remodel.
What do closing costs include?
Closing costs in Mexico are quite different from the United States. Closing costs are assessed to the Purchaser, and these are not negotiated for payment by the Seller. These costs typically include things like Acquisition Tax (2% of property purchase), Trustee Bank fees and Public Registry fees.
How long does the process typically take?
From the time an offer is accepted, buyers should generally anticipate about 60 days of closing time before the title is officially transferred. Trust us, your Cabo property is well worth the wait!
If you have more questions about buying or selling real estate in Los Cabos, or need more information, please contact us. Explore the latest real estate opportunities in homes, residences or homesites at here.