Buyers Head South of the Border

(December 31, 2004) -- American retirees, baby boomers, and middle-aged vacation-home buyers have turned to Mexico's beach resorts for the picturesque views and reasonable prices they offer, especially in comparison to Southern California.

Until the North America Free Trade Agreement (NAFTA) took effect in 1994, foreign buyers had no access to title insurance or mortgages; and that lack of protection left them vulnerable to government land seizures. Since then, however, Stewart Title has opened offices in Mexico City, Riviera Maya, and Los Cabos, allowing Americans to purchase title insurance to safeguard their properties across the border. The company now has plans to expand into Puerto Vallarta, Puerto Penasco, Tijuana, San Miguel de Allende, and Guadalajara.

U.S. buyers also have access to mortgages from Birmingham, Ala.-based Collateral International and Conficasa of Houston. Collateral International, for instance, offers $100,000 to $800,000 in financing. To purchase a residential property in Mexico, Stewart Title Guaranty de Mexico advises U.S. buyers to hire either a title insurance provider or a Mexican counsel to determine if the seller legally owns the property and has the legal authority to transfer it. They should then have a legal adviser review the contract and contact a title company to handle the escrow of funds.

Americans also should take out a property insurance policy to guard against recording errors, liens, encroachments, taxes, fraud, and misrepresentation. Additionally, for condominium properties, it is important to scrutinize the documents creating the condominium regime.

Source: Houston Chronicle (12/27/04); Moreno, Jenalia