Yucatán has been the attention of many international real estate investor in recent years. With the many Haciendas, the old colonial architecture, and the increasing amounts of non-Mexican buyers, where can people begin their process into buying property here in paradise? We asked Mitch Keenan, a
Yucatan Real Estate broker, very well known throughout the entire Yucatan Peninsula, and with many years of on hand experience in
Mexico Real Estate to help us out with this post and
blog.
This post is about real estate in the states of Yucatán and Quintana Roo. The author, Mitchell Jay Keenan,CRS is the general director and the operating broker for Mexico International Real Estate.
Keenan has been living and selling real estate in Yucatán for over 10 years. He has been a licensed broker in the USA since the 1980’s. He holds a GRI (Graduate Realtor Institute) and a CRS (Certified Residential Specialist) certifications from The National Association of Realtors (NAR). He currently lives on his Quinta between Mérida and Progreso with his partner and their four companions; Wazer, Lover, Lucky and Miri.
Yucatan Real Estate Brief History
Understanding the dynamics of the real estate market in Mexico requires a reflection on the socio-economic conditions that have developed in Mexico over the last several decades. The large middle class that has emerged in the last 30 years has provided for a more robust market. Additionally, with the growing foreign interest in living and investing in Mexico, the market is becoming more dynamic and secure for investment and ownership.
Historically, Mexico was a country of basically two large economic groups; the rich and the poor. The poor rarely owned real estate and the rich tended to subdivide what real estate they had and pass it on to their heirs.
The current real estate market (where two previously unknown parties come together to buy/sell real estate) is still a relatively new business in many regions of Mexico. This is the reason why, in most of Mexico, there is no MLS, no real estate licensing requirements for agents, no governmental oversight, limited institutional financing, and few large, organized real estate companies or real estate professional organizations.
The exceptions to this current scenario are Mexico City, Monterrey, Guadalajara, and many of the coastal resort areas, where there are limited MLS’s, large brokerage firms, and functional professional organizations like AMPI.
It is important to remember that Yucatán has been like an “anonymous region” separated from Mexico for decades. Yucatecos tend to think of themselves as Yucatecans first and Mexicans second. Rules, regulations and new businesses practices have tended to evolve here more slowly than in other regions of Mexico.
Mexico Real Estate Purchasing Process
Historically, in Yucatán, when two individuals come together in an agreement to buy/sell real estate, the parties have utilized a “promise to buy/sell” real estate agreement. The agreement is typically drawn up by the Buyger’s notario.
Note: the buyer is responsible for paying the notario and closing costs. The seller is responsible for paying their capital gains taxes.
Upon signing, the buyer gives the seller a deposit to hold as earnest money to seal the deal. In return, the seller provides the notario with current and notarized escrituras (title documents), cedulas (tax statements), planos (lot plan), personal data, and corresponding information.
This “promesa de compra/venta” is a vehicle still popularly used in Yucatán, and it is not unusual for a seller that is not represented by a real estate agent to require this contract with the understanding that the seller will hold the earnest money deposit.
Should the buyer fail to buy, at no fault of the seller, the buyer will forfeit the deposit. Should the seller for no fault of the buyer, refuse to sell, there is a penalty clause in the contract penalizing the seller to return the amount of the original deposit and pay a penalty equal to the amount of the deposit. If the seller does not return the deposit and pay the penalty, the buyer will have a very strong case for filing a lien against the property and pursuing legal action against the seller.
