We're headed down to Puerto Penasco, Mexico for a few days. I've set up a couple of older posts to pop back up so our avid readers will have something to read. Original content posting may be light.
Why Puerto Penasco?
Well the primary reason is to reach out to a couple of real estate agencies down there, develop a working relationship with them, and educate ourselves about the nuances of real estate in Mexico. We get inquiries about Mexico property, particularly Puerto Penasco (aka Rocky Point) and need to understand it better. (Note to the IRS: this is why you will see a small deduction on our 2007 taxes).
The secondary reason? Kenny Chesney sums it up pretty well with his song, "Beer in Mexico"..
Too old to be wild and free still
Too young to be over the hill
Should I try to grow up
But who knows where to startSo I just …
Sit right here and have another beer in Mexico
Do my best to waste another day
Sit right here and have another beer in Mexico
Let the warm air melt these blues away
[youtube]http://youtube.com/watch?v=1fxJK-ujCPM[/youtube]
Email This Post
Print This Post
Thanks for reading! We value your thoughts and opinions, so please feel free to leave a comment. Please contact us if you have any questions or need help. You can also get automatic updates for this blog free via: Potentially Related Posts on Phoenix Real Estate Guy:
{ 12 comments }
Have fun. I am curious to see if there is a way around the 99 year lease issue. Keep us posted.
Interesting, how do the commissions work in Mexico. Is there even REALTOR commissions?
Have fun and make sure to check out the Roger Clyne concert Saturday night. Border wait times coming home on Sunday are getting pretty long, so leave early Sunday or stick around til Monday if you can. A few resources on real estate in Mexico - particularly in Puerto Penasco…
The business, tourism and real estate blog that I write…
http://www.puertopenascopost.com
Articles on property ownership written by an attorney here (explains the “99 year lease” which is actually a 50 year perpetually renewable bank trust)…
http://ofarrill.tv/article_english.html
Tourism oriented website…
http://www.puerto-penasco.com
To answer a couple of the questions, realtors in Sonora are now required to be licensed by the state (the first state in Mexico to do this) and commission structures are similar to Arizona. Penasco realtors are now paying referral fees to AZ realtors. Property ownership in the “restricted zone” requires foreign owners to purchase through a 50 year bank trust that is perpetually renewable (in theory, not too different from a deed of trust in AZ) - where the bank acts as trustee and buyer acts as beneficiary and directs bank on all actions just as if they own the property. Title insurance is available through Stewart Title and First American. And mortgages are becoming increasingly available. There is a lot more information on these topics for those who want to read about it in the links I posted above. I encourage everyone to read up and visit Penasco soon.
I did not think that you would have any blues to be driven away! Have all the beer you can and waste as many days as you can. All the best!
Real Estate in Mexico has slowed up a great deal as Arizona’s market has slowed. As an investment, look into the Mexico taxation of profit. I believe it is either 30 or 33% so your property will have to appreciate a lot to get back closing costs and appreciation. Bank Trusts were explained earlier, but if you or your investor are buying, BE SURE YOUR PROPERTY is already in a transferable trust. Minimally use a “notario” or an “abogado” whom you hire to work for you. A notario is similar to our lawyer but I do not believe they can practice in a courtroom. An abogado is an attorney. Do not believe either an Amercian or Mexican seller. Confirm anything and everything for yourself. Let the buyer beware, Mexican law is vastly different than our law, and Mexican real estate law bears no resemblance to our real estate laws. NONE! Most properties can be rented for a night/weekend/any length of time. Try it on before you buy it! Bad neighbors, like bad neighborhoods make for a lousy investment. Renting out your property to cover some of your costs is a viable option. Use a good rental firm, and compare prices. Most charge you about 35% to rent your unit, PLUS taxes, impact fees, etc. Oh, and check into your electric bill and availability of fresh water. Electricity and fresh water are valuable commodities in Rocky Point. Water purchased through the city of RP is EXPENSIVE. Last, building codes in Mexico, if they have them, are virtually non-existent. If you are buying anything but a new condo, take your favorite US made, professional home inspector to look at wiring, plumbing and HVAC particularly. Seek out information about your HOA. Talk to ALL of the board members. I emphasized ALL of them for a reason too lengthy to es’plain here. I am not an expert at Mexican real estate but I am a Rocky Point property owner via Bank Trust and we rent out our three story water side home throughout the year. Ours is rented a lot, but costs are NEVER covered by rentals. Have fun in Rocky Point. Each time I cross the boarder to stay in our home, my blood pressure decreases about 40 points. Last, as of January 1, 2008, you will need a passport to travel back and forth. Get one NOW. The wait for passports is ridiculous. I think I said the word “Last” in here more than once. Forgive me, my mind was bouncing around. Philip
Jay - Have fun - do you have to go for work? Maybe with a few extra beers, it won’t feel like work.
A couple of clarifications on Philip’s comment.
First, I agree with his sentiments about being cautious. Things are different down there and I recommend working with one of the well known realtors in town (who as I mentioned above are now required to take courses and get licensed).
I would also recommend hiring a Mexican attorney (see my blog post at http://www.puertopenascopost.c.....index.html) for your real estate transaction (lawyer=abogado in espanol by the way). A “notario” is effectively a higher level lawyer who is appointed to act as an official lawyer of public registry for a region of Mexico. All official legal transactions to be recorded are reviewed and approved by the notario (note this is very different from a notary public in the U.S.). Raul O’Farrill’s articles page has a lot of good information about notarios, real estate, etc. at http://www.ofarrill.tv/article_english.html.
Finally, passports are NOT required in January 2008. They are expected to be required in summer of 2008 but the Department of Homeland Security may allow a different form of ID. Either way, I encourage everyone to apply for a passport now anyway. My blog posts at http://www.puertopenascopost.c.....index.html talk more about the border crossing and passport status and issues.
Yeah this does sound interesting. Post more info about your visit there later. How do the commissions work?
Not sure about Mexico. But you can get good real estate rebates in Texas from http://www.dfwrealties.com
Back in 2006 I purchased a condo at Las Palomas in Rocky Point. The condo was supposed to be delivered by August 31, 2008 but last I heard they aren’t expected to be finished until the end of the year. The contract states that if the unit is not delivered by August 31, 2008, I can get my money back. However, Las Palomas says that a judge has granted them a “Force Majeure” allowing them to extend the delivery date.
My question is this: am I still bound by the original contract if they go beyond the original date? What legal rights do I have to get my money back?
To give some additional background, my wife and I moved to Florida to be closer to her mother who has cancer. We haven’t been able to sell our house in AZ and now owe more than it’s worth. We are renting a house in FL. We are renting out our house in AZ, but not covering our mortgage costs. Needless to say, we can’t afford to go through with the condo unless we foreclose on our AZ house, and even then I’m not sure if we can afford it any more. I was counting on the condo not being ready by the delivery date so that i could cancel it and get out of the deal.
Any help is appreciated!
Howie
Howie - I am not well versed in Mexican real estate law, and can not offer any advice. You’d be best served speaking to an attorney that is knowledgeable in Mexican real estate/contract law. Things can work *very* differently in Mexico than they do in the States…
i have a large home in rocky point i need to sell its listed with coldwell i am very dissipointed with ther service was thinking your company could help i allso have nice largelot to sell both propertys are prime pieces inlos conchos contacte me please thanks
Comments on this entry are closed.