A Basic Guide to Buying and Selling Real Estate in Los Cabos

It’s amazing how much can be obscured by the simple act of translation. Buying and selling real estate in Los Cabos, for instance, is not a difficult process, but some common misconceptions–fueled by foreign language documents and poorly informed travelers– have left many Americans and Canadians with the mistaken impression that they aren’t able to own land in México, or that the terms are particularly onerous.

Neither is true…in fact, buying a dream home in Los Cabos has never been easier than it is right now.

Common Misconceptions & The Truth About Real Estate in México

Much of the confusion about buying real estate in México stems from misconceptions about the “restricted zone,” and Mexican bank trusts known as fideicomisos.

Mexican law states that persons of any nationality can own real estate in the country, however, there are certain regulations for property within 50 kilometers (approximately 30 miles) of the coastline, or within 100 kilometers of México’s border with other countries. This area is known as the “restricted zone,” and its specific regulations were included in the Mexican constitution for reasons of national security.

Can foreigners (U.S. and Canadian residents) buy real estate in the restricted zone? After all, that’s where many of the best properties, from beachfront homes in San José del Cabo to hillside luxury villas in Cabo San Lucas, are located. The answer is yes. You can buy and sell real estate in the restricted zone, and even will it to your heirs after your death. Foreign owners, contrary to any misconceptions, have the same rights of ownership and succession as Mexican nationals. However, all of this must be done within the fideicomiso system.

What is a fideicomiso (pronounced fee-day-coe-mee-so)? It’s a bank trust, generally with a small annual fee, and a renewal period set at 50 or 100 years. Contrary to another common misconception, a fideicomiso is not a lease. Leaseholders cannot sell their property, remodel it, or use it as collateral. Owners can, and despite the strangeness of the process for U.S. or Canadian residents, a fideicomiso is essentially the same as simple fee ownership. The bank does not own the real estate. You do.

The Purchasing Process

The purchasing process in Mexico is actually very similar to that in the U.S. or Canada. You find the home of your dreams and you make an offer. If that offer is accepted, then you proceed to closing. There are specific details to note in each part of this process, however, beyond the fideicomiso aspect.

The first is the art of finding the home of your dreams, or at the very least a secondary home which you or your family or friends may use as a seasonal residence. It’s very important, in México as elsewhere, that you choose the right ally. Windermere, for example, is a real estate company with over 300 offices and 6,000 agents west of the Rockies. Our agents have well over 100 years combined experience in the local market, and know all the ins and outs and the subtle distinctions and legal fine print, of buying and selling real estate in Los Cabos.

We’re a name you can trust, and we know every available property in the area, including those that are still in the planning stages. This is an important note, which we’ll explain below.

With resale real estate, the property is purchased from an individual, with a reservation held by deposit (typically 10% of the purchase price), followed by an OTP (an offer to purchase), a contract or purchase agreement, and finally the transfer of the title deed (via fideicomiso). With pre-construction real estate, the property is purchased directly from the developer, which generally entails a waiting period during the construction phase before you can take ownership.

Make sense? See, we told you it wasn’t as complicated as you had been led to believe.

Ready to Get Started? Ready to Get Started?

Call us from the USA / Canada at 011 52 (624) 228-3509 for more details. We’ll help you find and buy your dream home in Los Cabos.  Contact Us here