Loreto Real Estate
The agent, the home, and the process–A quick overview
Before you buy, investigate!
Spend time getting to know the area, most suggest the process of elimination by visiting several cities of interest and eliminating the ones that do not meet your wants and needs. “What I love about Loreto, you may not” so explore the Peninsula first. Once you believe you have found your paradise destination it is suggested that you spend a few months renting a place to get the “real feel” of the area, be sure to stay or visits during different times of the year to experience the seasonal climate changes.
Living like a local, not a tourist, is key to really understanding what the area/town does and does not have to offer.
Deciding to buy ~ The Real Estate Agent
Real Estate transaction here in Loreto, based on my personal and professional experience, are similar to a transaction is the United States in that there is an offer, a negotiated acceptance and a hopeful closing, but everything in between is very different!
Through first-hand experience of purchasing and selling property in Loreto my learning curve was steep, but thankfully a quick one!
Licensing is not yet required as of 2018, nor is any kind of basic Real Estate education requirement for the understanding of Ethics, Agency relationships, Representation, disclosure or accountability. That means that anyone can call themselves a Real Estate agent and represent a buyer or seller in Loreto. Most having no real estate education to practice by, or to pass a licensing test! As it stands today there is no current legal accountability for the real estate agent in Loreto, or Baja California Sur. I expect that will change and licensing will become a requirement just as it is in the States, but until then be prepared, your own due diligence is very important!
As a Licensed Real Estate agent in California for over 33 years (http://dre.ca.gov license number 00988564) I have begun to practice in Loreto. Based on my experience of working with a few agents in town, as well as having double ended a transaction myself, I can seriously say that those 33 years of experience I have brought with me to Loreto have proven to be invaluable!
Keep in mind a good agent will be an ethical one, showing you all homes that are for sale in Loreto, not just their listings. They should share with you any issues, if any, that affect the properties you are looking at while educating you along the way as you explore the different areas of Loreto. The more information you have the better equipped you will be in your decision-making process on a specific home.
The current laws governing the Real Estate professional in Baja California Sur are lax at best, so do your homework before you choose an agent to work with… and remember NO question is a dumb question except the one you don’t ask! So please ask Questions!
The purchase deposit, also known as a good faith deposit to purchase
Once you have an accepted offer you will be required to show your good faith as a buyer by making a 10% good faith deposit, this is based on the agreed upon sales price between you and the seller. The funds are usually held in trust or with an Escrow holder as you would do so in the United States or Canada, never write a deposit check out to a person, as those funds could be as good as gone!
Buyer closing cost on average are considered high. A good estimation is about 6% to 10% of the purchase price. Some of the costs are fixed and some are in relation to the purchase price of the property. The acquisition tax (ISABI) which is a flat 2% of the price and tends to be a bigger portion of the closing costs in total.
Additional closing costs include but not limited to the Notary fees, various registration fees and the appraisal fee. The seller is responsible for the real estate commissions, just as the case with most transaction in the United States and Canada. Those fees can run the seller in upwards of 10%. All Closing costs will be expressed in the Mexican currency, which is Pesos.
A Notario’s job, as far as a Real Estate transaction goes, is very important. Most cities have one or more registered Notario’s with whom to work with or you can always choose to use a Notario from another city to handle the transaction as well. The Notario is to act as a neutral third party and the buyer customarily has choice of what Notario they would prefer to use, your agent will most likely refer you to one based on a preference and experience they have had with a specific Notario.
The job of a Notario includes assembling all the documents required for a valid transfer of title; Verifying the legal identity and authority of each person who will be executing the documents, both buyers and sellers; Drafting the new trust (Fideicomiso) for the new owner; Calculating, collecting and paying all of the transfer fees of taxes and other official fees either right before or right at the closing/transfer of the title to the new owner; Working throughout the transaction with the closing agent with the timing of the issuance of the new trust documents (Fideicomiso), and retaining a copy of the original signed documents and all supporting documents pertaining to the sale and title transfer of the property.
A Notario’s role is very similar to an Escrow/title agents or Attorney as it relates to the sale and transfer of real property in the United States.
Timeline from Start to Finish
Many factors come into play with the timing it takes to close a real estate purchase or sale transaction. In today’s current market expect anywhere from 90 to 120 days (3-5 months) is a typical time line to close for a foreign buyer and approximately 30 to 60 days (1-2 months) for a Mexican citizen.
Remember it is still a little bit of the wild west when it comes to Real Estate in the Baja California Sur state of Mexico, so use your common senses, ask questions make sure you are working with an agent with a good reputation and someone you feel you can trust to work with and for you.
The end goal of your purchase in Loreto, or anywhere in Mexico, is to be able to enjoy endless years of pleasure and memory making in the home of your dreams South of the border!