HOW TO SELL A HOME IN MEXICO

There are many companies and websites which specialize in real estate in Mexico. Most of them are concentrated in one local area but have either a national or international clientele and reach. The is no national MLS or website at the current time that does a good job offering all the homes within a given market.

A real estate broker is a valuable resource if you wish to widen the viewership of your property listing in the real estate market, but it is not necessary to work with a broker to sell a home in Mexico. That said, if you are not considering how you will promote your home to potential buyers.

Word of mouth is the most valuable, and the next best thing to do is to find a company or website which presents a professional and well laid out site, and look through their listings to see which agent matches up with the type of property you are selling.

Some real estate agents will only accept exclusive listings, but others will be happy to work for you when others are also selling your home. That said, a single agent will probably focus more on the sale of your property if they feel they are not competing with multiple others to sell your home. The best thing to do it to talk to the agents you are considering listing with and see what they say.

The short answer is no. Plano is a tool that helps you with the sales transaction, once you have found a potential buyer for your property. It does not replace the great work that your real estate agent does to get your home out there and find you a buyer.

Every residential property is registered with the municipal government. Every property has a recorded value. This recorded value will be adjusted for inflation over time so it does not remain at the same value forever.

When a property is sold, the owner will be assessed a capital gain tax, the current rate assessed is 32% of the net gain, meaning 32% tax on the amount of the difference between the value of what the house was registered at, and the value of what it is being registered as selling at.

Your property’s value is available to see in your escrituras (deed). However this shows the value when the property was sold to you, not its actual current value. When you register your property with Plano, we will be able to look up the value with the municipality and provide it for you within the app. Alternatively, a real estate attorney in Mexico can also look up the current value if you provide them with a copy of your escrituras or fideicomiso.

When you register your home with Plano, you can generate an Estimated Settlement Statement. This document will tell you what your closing costs would be assuming you sold your home for a specific value that you provide. The Settlement Statement breaks down all the taxes, fees and commissions in a simple way that provides an understanding of how everything is calculated.

You can configure your property details to add information about deductions your are claiming and the estimate will be regenerated to reflect the information you have provided. In this way, you have an estimate of what your costs will be and there won’t be any surprises when you actually close and you get a Final Settlement Statement.

Any foreigner with a legal residency in Mexico, either permanent or temporary, can claim an exemption on these taxes up to the approximate amount of 4,500,000 MXN per person in 2022. The amount of the legal capital gains avoidance changes over time and is based on a number of variables, but historically it has only increased, allowing a slightly higher amount to avoid every year which helps with the historically increasing value of properties.

This legal capital gains tax exemption applies to multiple owners who also have residency and utility bills showing that the property is their residence. For instance, with a married couple, each person would be granted this tax avoidance amount.

Homeowners are allowed to use this tax credit once every three years. So if one were to buy a property, they could sell it immediately and would benefit from the tax credit, but then would not be allowed to use it again for 3 years from the sales date.

If you have renovated your home since you purchased it, you may be able to claim the a deduction in the captial gains owed, by demonstrating the additional value that you have added to the property since its purchase. For this to be valid, you must present facturas (official government issued invoices) for the renovation. These facturas must be issued to you, they must show the address of the home, and they must be for construction services.

The total amount for which you have facturas will be deducted from the amount of gains that is calculated at sale. In this way the tax you owe on the gains will be reduced.

Many homeowners do not collect receipts for the work done on their homes, for varying reasons. If this is the case for you, an alternative way to prove that capital improvements were done to your home is to obtain a new and current appraisal from a legal government representative qualified to do appraisals. A second way is to work with a local lawyer who will ask you for any receipts you have, along with photographs of the improvements.

To obtain a current valuation of your property, you’ll need to provide evidence of renovation or improvements with documents such as construction quotes and payments, city and INAH permits (if they apply to your home), before and after photographs, and/or architectural drawings.

Any evidence you have which shows that money was spent on improvements will help justify a higher valuation for your property. This valuation can be done by a legal entity you hire to do so, or your attorney can orchestrate it. The special valuation is unlikely to offset your capital gains tax as much as having legal facturas would since they are hard evidence of money spent, but it will help reduce the taxes a great deal. The appraisal is somewhat costly as well, and is charged as a commission on the total capital gains saved.

Sellers will of course be responsible for any back-taxes owed, and will need a document showing that there is nothing owed on their utility bills (easy to obtain from each of the utility companies). There are no other fees for sellers.

The documents you will need for a "transfer of rights" which is to say a sale depend on how you own your property. When you own using a Fideicomiso, you will need the fideicomiso document. If you own outright and not via a fideocomiso, you will need the Deed, or Escritura in Mexico.

In addition, you will need the following documents about your property:

- the Plano Catastral

- the Cedula Catastral

- a Certificate of No Debt on your Predial (yearly municipal tax)

- a Boleta de Inscripcion

- an official Property Valuation (in most states)

- a Boundary Rectification (in some cases)

There is more detail on each of these documents below. When you add your property in Plano Settlement, the application will advise on the specific set of property documents that will be required and how to obtain them.

In Mexico, the Escritura is the deed document that details the data of the previous owner(s) and buyer(s), the Fideicomiso holder, the legal property description, and relevant dates and official stamps. This is relinquished by the seller to the buyer at the closing.

The Fideicomiso contract is the legal document outlining the bank's duties and responsibilities with regard to you as a foreigner owning property within the restricted zones of Mexico.

There is a fee to establish a fideicomiso, a fee to transfer it to a buyer, a fee to close it. In addition, there is an annual fee for the bank to maintain it in your name.

If you do not have a copy of this document, the bank where your fideicomiso is held will have a copy.

The Plano Catastral is a one page document showing the official size, location, and layout of your property. It is usually included within the Escrituras you receive when you buy the property, but can also be obtained at the local Catastro office or even online.

The Cedula Catastral is an official document showing that the property exists on the catastral register, and what it's value is for tax purposes. It can be obtained at the local Catastro office or even online.

Getting a valid Property Valuation involves an official who is registered and accredited by the government who will come to the property and give a current valuation based on a large number of parameters. Plano will contract with a specialist in your area to have this valuation done for you as part of the sale.

Note that while most states in Mexico do require a property valuation in order to sell the property, it is not required in all states. When you add your property to Plano Settlement, the application will be state if it is required for you and how to obtain it.

Getting a Boundary Rectification involves a registered and accredited official who will come to the property to verify the actual size and layout according to city records. It may also involve having all immediate neighbors whose properties abut the one in question sign off on the official size.

A boundary rectification is not required for the sale of all properties. Plano will advise if one is required and has resources that you can contact to complete this work, if required.

This is a legal document which the lawyer you are working with or who is working on your behalf needs to draft in order for the transfer of rights (sale) to take place.

A seller has more to do to prepare for the closing. The good news is that Plano takes care of all of it so you can close a lot faster than you typically would.

Plano guides you through the process, shows you what documents you need to collect and helps you out with their collection when you need. You can start this process as soon as you register your property with Plano Settlement. Once all your documents are ready, you will be what we call "clear-to-close".

"Clear-to-close" means that you are ready to transfer your property to the buyer. Traditionally, sellers begin this process once they have a buyer. Plano however is different... we give you the tools to complete this process before you even have a buyer. That way, once you secure a deal with a buyer, you are ready to close immediately instead of 3 - 6 months later as would be typical with a broker and a traditional notario.

In broad strokes, the process to become "clear-to-close" involves two steps. First, you will assemble and upload your property documents to the Plano Settlement application. After that, we will work to assign the property temporarily to a fideicomiso that we create on your behalf at no cost. This temporary fideicomiso is the key to being able to close instantly, because it is structured in a way that allows the instant transfer the title to your new buyer.

If you own your property with an existing fideicomiso, we will work to cancel it on your behalf before transferring the property into the new and temporary fideicomiso.

It can take time to find a buyer. Why not spend this time preparing for the sale? In that way, you will be ready to close the moment you find a buyer and agree to a deal, rather than waiting until that moment to even begin.

You don't have to actually close in that moment. You and the buyer could agree to delay a few days or weeks. However, you will be ready to close at that moment and can if you choose.

When you are clear-to-close, you will be awarded the "clear-to-close" badge that you can share with your broker and potential buyer. This badge contains all the details of the property that they need to check to know that you are ready to sell today. Your broker will be able to display the badge on your real estate listing to boost the saleability of your property.

Also, and if you want, you can create a Deed NFT for your property that you can use to sell directly to the buyer. Doing so makes the sales process very easy once you find a buyer. It also means that you have options for selling your home in more places such as marketplaces for tokenized real estate.

However, to close on the sale of your property with Plano Settlement, a Deed NFT is not required. It will be a bit plus for the buyer to simply see your badge and know you are ready.

Homes that are ready to buy now are more likely to find a buyer for two reasons.

Firstly, buyers know your home will be a straightforward process that they can purchase easily and quickly. Knowing exactly when they can move in and that there won't be delays in the process is attractive.

Secondly, brokers are more motivated to sell homes that close quickly because this means they get their commission paid quicker.

So when buyers and brokers motivated, your home moves faster.

It is no problem to continue to work on preparing your property for the close after you have a deal with a buyer. After all, that is what most sellers do when they are not selling with Plano Settlement.

The great news is it takes less time to become clear-to-close with Plano, and your buyer will be able to track progress directly in the settlement app. That way, both you, them and your broker will know exactly where things are at and how much more time it will take to be ready.

Buyer and seller typically execute a sales agreement to details the terms of sale. After that, the buyer typically secures the deal by sending a percentage of the sales price to an escrow provider to demonstrate their intent with respect to the purchase. The normal amount is 10% but it is negotiable between buyer and seller.

The sales agreement is typically prepared by the real estate broker with the relevant experience. However, you can use Plano Settlement to generate and execute this agreement as part of the sales process. The sales contract used by Plano Settlement has been approved by AMPI, the national association of realtors. A copy of it can be viewed here.

The sales agreement is a binding legal document in Mexico between you and the buyer and it typically stipulates penalties on both sides for backing out of the deal. As such, it can have real world consequences. You should ask the creator of this document about their contract and seek legal advice if you have any further questions.

Escrow funds will be safely held inside a smart contact on the Ethereum blockchain until Closing is complete and funds are transferred to seller. These funds will be released to the seller once the sale is concluded.

Absolutely. Plano is able to issue your proceeds in any currency you prefer, and can wire them to one account or to several accounts. However the buyer chooses to pay, you can receive your funds as you like. For any conversion that needs to occur, the exchange rate that will be used is the exchange rate on the day of the close.

Yes, if you prefer to be paid in cryptocurrency, that is an option with the Plano Settlement application. Even if they buyer is purchasing with a non-crypto currency, your payout can be in Bitcoin or USDC.

For the closing process to begin, two things need to happen. Firstly, you need an executed Sales Contract. Secondly, all the documents required to start the close must be submitted by yourself and the buyer. After that, the closing process begins.

During the the closing process, the legal team responsible for the transfer of the property will get to work and prepare new escrituras for the property. If you own your property using a fideicomiso, the bank that administers the fideicomiso will be notified that a sale is in progress and will be directed to either transfer the fideocomiso to the buyer, or terminate it so that a new one can be created for the buyer.

All of the above legal work will be handed by Plano Settlement.

While it can typically take 3-6 months to complete the sale of your home after you agree on an offer with a buyer, it doesn't have to be the case.

Plano Settlement exists to shrink this time wherever possible, as well as give you strategies and tools to start the process of sale before you receive an offer. In this way, you can do all the work upfront before you find a buyer and close quicker.

Specifically, with Plano Settlement, you can get within 3 days of the close before you execute a sale agreement with a buyer. That way, once that deal is done, you can close within 3 days.

As soon as you have an executed Sales Contract in place, you can Plano will calculate the calculate the taxes that are due to the sale. This calculation will be an update to the estimate that is available to sellers when they create their property in Plano for the first time. Provided the underlying data provided when the property was created has not changed, the calculation of taxes should remain the same.

Yes you can. In fact with Plano, it is the only way to conclude the transaction.

Within the Plano app, sellers authorize Plano to conclude the transaction their behalf so you don’t have to waste time in the notario’s office.

Most of the documents you need to prepare to sell your property are listed above under the section "Preparing for the Sale". Once those documents are submitted, the closing process will start and the legal team working behind the scenes at Plano settlement will get to work. A few days before the closing, you will be asked to prepare copies of your most recent bills and proof that payments are up to date.

The specific bills that you need to demonstrate are for water, electricity and trash. The proof of up to date payment you will need is a receipt of payment issued to you by the supplier.

You can track the progress of the settlement online day or night within the Plano Settlement application. You can also configure notifications of important milestones to be sent to your cell phone or email.

The date of the closing is clearly visible on the app. On or before that date, the buyer will transfer the remainder of the funds due into escrow based on the instructions provided in the application. Provided funds are received, the new escrituras will be completed and funds will be forwarded you. At that point, the status of the close will update within the application to "Completed".

Please ensure that you complete actions required to deliver the new keys to the buyer as per the arrangements you have made. More on that below.

It is possible that things can happen that are outside of your control and that may prevent the close from happening. This is typically the case when some of the paperwork needed to conclude the sale is not ready in advance of the date of close. If this is the case, the closing will be delayed until the issues can be resolved.

The real estate agent who has brokered the sale will be responsible for managing the transfer of keys and will work to obtain them at the time of the closing. The broker will be in touch ahead of time and will collect all information needed.