The Puerto Escondido real estate market is booming as ex-pats are relocating to the gorgeous Oaxacan coast. The number of homes for sale and properties for sale is decreasing as the demand is high, especially moving into 2024.
If you’re looking to live in this paradise as many others other, we’ve put this guide together to help you find out everything you need to know before purchasing your dream home/land in Mexico.
Puerto Escondido Real Estate – What you need to know
If you’re looking to see the houses and homes for sale we’d recommend skipping past this section and going straight to the listings.
Here however we are going to break down the step-by-step guide to buying property in Puerto Escondido for ex-pats.
Where to buy Puerto Escondido Real Estate
If you’re looking to get yourself on some prime Puerto Escondido real estate you may first want to educate yourself on all the different areas of Puerto.
A lot of the land in the downtown area is high in demand so finding a good deal on the property can be quite difficult.
The Puerto Escondido real estate demand is expanding like an overflowing water bucket. That is to say that on all sides the demand is flowing both up and down the coast.
The areas you may want to look at our Playa Palmarito to the Northwest and La Barra to the southeast.
Before Buying Puerto Escondido Real Estate
Before getting excited about rushing the signing of a contract on a property there are a few things to be aware of. If it seems too good to be true then the odds are it is.
Ejido Land
If you’ve ever heard about a property being confiscated from foreigners then odds are it was Ejido land. Ejido land can be obtained for a great deal but the biggest issue is that after buying, it doesn’t even belong to you.
Ejido land is land that was granted to the community (often indigenous) and is now highly sought-after due to the fact that it is normally on the waterfront.
The issue however is that to actually own Ejido land it needs to be unanimous from the community that you can separate your piece of land from the ejido and convert it into freehold.
The strenuous process leads to people trying to do it illegally by bribing officials or falsifying records and this is where the risk of the land being taken off you so arises.
There are legal firms that can convert ejido land into freehold however it is normally recommended to avoid ejido land.
Buying property near the coast/water
You may have heard that foreigners can’t own land within 50 kilometers of the water or 100 kilometers from an international border. This restricted zone is known as ‘zona restringida’.
This section is especially important if you’re looking for Puerto Escondido real estate as pretty much everything is in the restricted zone.
Until 1973 non-citizens could not own property in their name in this zone but a workaround was created called fideicomiso. Essentially it is a trust that is authorized to purchase property in this zone.
A bank acts as the trustee and you are the grantor and beneficiary owning full control of the property. This includes the purchase, sale, and management so in short, the land is yours.
Fideicomisos need to get renewed every 50 years but you can carry on doing it forever and pass it on to your family once you die.
Appointing a notary
A notary is appointed by the state governor and must have a minimum of 5 years of experience as an attorney. The notary is your representative so ensuring he speaks the same language as you is imperative.
Relying solely on the real estate agent is never advised. The notary will also prepare all paperwork and record the new title and collect taxes and fees.
The Puerto Escondido real estate purchasing process
Most of this will be done by your notary and you just need to make sure you understand the contracts and get them translated where necessary. Remember that the Spanish version of the contract is the binding, document, however.
Make an offer
Sounds pretty straight forward and it is. The first offer is normally a verbal offer which can be through the seller or real estate agent.
Sign The Sales Contract
This will be the document that contains the purchase price and any other conditions of the sale.
Pay Deposit
The deposit can be any amount but the standard deposit is approximately 5-10 percent of the total sale price.
Initiate Fideicomiso
As you’re buying Puerto Escondido real estate odds are you’ll need one so this is the point in the buying process that you start the process. If the previous owner has one they can transfer it into your name however it is worth noting that if it is transferred the 50-year timeline of the fideicomiso doesn’t restart.
Permission from the foreign secretary’s office
The foreign secretary’s office will require you to sign a statement that all dealings will be governed by Mexican property law and that you can’t seek foreign legal jurisdiction.
Avalúo and Sign the Escritura
The notary will take care of this but this is where the valuation will be used for tax purposes.
You will sign the escritura and make the closing payment. Once finalized this will be your title to the property
Pay fees and taxes and initiate property registration
Once again the notary takes care of this. Your only responsibility is to pay. After this, the final registration will be completed and recorded. This can take up to 3 months.
Closing Costs
The closing costs come to around 5%. This includes the notary fee (around 1.5%), a transfer tax fee (around 2%) and fideicomiso setup fees, etc. The annual fideicomiso maintenance fee is around 5000 pesos per year.
Estate Companies
Now that you’ve hopefully better educated yourself on Puerto Escondido real estate here are some of the main real estate agents that can help you find your dream land or property.
Puerto Escondido Real Estate Summary
The Puerto real estate has been having an influx of ex-pats over the last couple of years and moving into 2024 the demand for homes and properties is still high.
If you’re looking to experience living in this gorgeous Oaxacan destination in Mexico it is important you educate yourself on the areas around Puerto Escondido.
Understanding the information in this guide will allow you to make informed decisions and avoid missing out on the opportunity to live in paradise.
