5 Items You Can Not Miss in a Contract to Buy Property in Mexico
A purchase agreement or private sales contract is a MOST on any real estate transaction. I always advice my clients to sign this contract because it binds buyer and seller under the Mexican law and secures earnest money or down payment given to the seller.
So, as soon as you have made a verbal agreement to buy a property, make sure to have your attorney checking the following items carefully.
1.- Clear statement of the name of the contract and parties.- The whole name of buyers and sellers have to be exactly as their official ID´s. IFE (Federal Institute of Voters) for Mexicans and passport for foreigners. Make sure your name is also correctly spelled.
2.- Seller´s description of the property.- In other words, what are you buying exactly? Make sure the contract states (as seller´s declaration) the property description with all the legal info as deed number, notario´s name and info, issue date and registration date including record number and book number.
3.- Deadlines.- States deadlines to perform title search, obtain CLG or certificate of free liens, SRE permits, and closing date.
4.- Property price and payments due date. – Write also all payments done and who is holding the money (no escrow service in Mexico).
5.- A penalty to any party in case of breach of the contract.- You will be surprised to know that a lot of deals don´t go through because one party easily decided to back off.
The contract should also contain any particular term agreed by parties.