I have invited an expert in the process of “Discovery” on Mexico Real Estate to walk us through why this step is important when selling or buying real estate in Mexico. Tavane McCombs, is a Realtor, Broker and Owner of Mexico Real Estate & Document Services who is in partnership with Mexico Real Estate DOCUPREP Legal Services.
You are selling your home in Puerto Peñasco and, as a foreigner to Mexico, you are required to own real estate with a Bank Trust instead of a Title or Fee Simple like in the US. With that comes an annual fee we pay to the bank in Mexico to maintain the Bank Trust so you can own real estate. This process which allows foreigners to own property in Mexico started 30 years ago. When a property goes into escrow, the Bank Trust is reviewed or updated; checking for any deaths or divorces of owner’s named in the Bank Trust. Mexico law changes may affect the Bank Trust too, so Discovery is critical to determine if there are any clouds on the title of the property. It’s very common in Mexico, that almost all Bank Trusts have details that need updated. Now you are beginning to understand why Discovery is so very important to you!
Who does the “Discovery” process in Mexico?
McCombs: In Mexico we don’t have escrow companies so the Discovery is done by a hired legal counsel to review the ownership status of the property. I use our professional Real Estate Attorney Leticia Marquez, Senior Attorney and partner from Mexico Real Estate Doc U Prep located in Puerto Peñasco. Ms Marquez ensures all of our clients to date have had clean titles. Ms Marquez shared, “The clouds found during Discovery give the seller an opportunity to correct the issues and ensure the buyer will have a clean Bank Trust and ownership of the property.”
What happens if a cloud is found in the “Discovery” process?
McCombs: It really depends on the cloud or issue found. Sometimes it is an easy fix but other times it turns into a legal mess that needs to be corrected before the seller can give clear title to the new buyer. In most cases it takes additional time and funds to correct the clouds on the Bank Trust before you can close. Unfortunately the seller has no idea until they are in the middle of escrow that there is a problem.
Who hires the real estate attorney in the “Discovery” process?
McCombs: Usually the buyer hires a real estate attorney to complete the escrow process and the seller gets surprised with the discovery. Most of the time sellers have not been informed there could be discovery of issues on their bank trust. When buyers hire the closing attorney, Sellers should have a conversation with that Attorney and have a hiring contract with that attorney, completing the closing and outline of their fees for Discovery. Here is why; in the purchase contract, the seller agrees to give clear title to the buyer, if the seller defaults, he has to give the Buyer back all of his inspection money and earnest deposit plus the seller has a stigma on his Bank Trust.
What are the two most common clouds on a Bank Trust?
McCombs: Most common is if there is a death of one of the owners, divorce or name change of the owners in the Bank Trust and it was not updated with these changes. Discovery by your real estate attorney will unveil these issues so you can enjoy a clean title on your property.
There is so much more to this step of Discovery in buying and selling Real Estate in Mexico. Feel free to contact Ms McCombs if you have questions regarding your Bank Trust or if you need a new Bank Trust. This article is for you to learn the basics of buying and selling real estate in Mexico. To learn more, please contact me!
More information and questions:
Krissy Nichols, Realtor, Investor Consultant Tavane McCombs
Mexico Real Estate & Document Services Mexico Real Estate DOCUPREP
US 480-862-6897 – MX 638-114-2286 firstname.lastname@example.org
See properties: www.mexicorealestatepro.com