Selling Property Mexico Basics

Do you have title for your property?

This may seem like a silly question, but in Mexico, its not. Some people have purchased what is called “ejido” property, which cannot be owned by foreigners. If you have purchased a new condominium, title may not yet have been passed from the developer to you. You want to ensure that what you have to sell is ready to be transferred to a new owner. You don’t want to run into problems at the closing that could delay or even cancel a potential sale.

Are you subject to a capital gains tax?

You need to know if you will be subject to capital gains or not, as this could certainly effect whether you can sell at this time, and at what price. This is an important calculation that can be done either by a notary, real estate lawyer or a real estate agent. Make sure whoever you are talking to know what they are doing. Your best bet is having a notary take a look at your situation, as they are the one’s who at the end of the day will be determining whether you pay or not.

Calculate your repairs and home improvements expenses

Are there things that need or should be repaired or improved before you put your home on the market? If you’re trying to get top dollar for your home, you’ll need to do some remodeling to get it into selling shape. Prioritize by choosing projects that’ll give you the most return on your investment. Estimate the costs of supplies and contractors, see what projects you can afford and adjust how much you expect to get for your home. Don’t give buyers a reason to haggle on price. Make necessary fixes like fixing leaky faucets and update your home with new light fixtures and hardware.

Keep up with the Joneses, but don’t outdo them. You don’t want to have the most expensive home in your neighborhood. If the neighborhood norm is hardwood floors and you have carpet, upgrade. Buyers these days expect stainless steel appliances and granite countertops in the kitchen.

Calculate your selling and moving costs

Real estate agent commission: This has been typically eight percent of the sale price, but it is not fixed as fixed commission rates are not allowed in Mexico. Commissions are negotiable, especially in a slow market, an agent may be willing to accept less of a commission. But remember, you get what you pay for. There may be a very good reason one realtor is asking for a full rate commission; because of their marketing program, expertise and level of professionalism.

  • Mortgage payoff penalties: Do you have a mortgage? Are you subject to a penalty? If so, can you negotiate with your lender to reduce it?
  • Capital gains tax: Check with an expert to see if you are exempt.
  • Moving expenses: Will you be selling furnished? Or will you be moving the furniture and appliances elsewhere?