Working as a real estate agent involves having excellent communication skills. A big part of learning about this industry comes from having a deep understanding of the basic real estate concepts and a variety of real estate terms.
Currently, there is a vast amount of terminology used during the process of buying and selling a property, so learning some of the basic terms involved in the process is very useful. In addition, it can be a great way to improve sales skills. With this in mind, the editorial team of Vallarta Real Estate Guide has prepared the first part of our guide to relevant real estate terms you should know.
The Apostilla verifies that a document is legitimate and authentic for use in a country that is a member of the Hague Convention, an international agreement regarding authentication of documents. Typically, foreign documents (such as birth, marriage or death certificates) must be verified in order to be used in Mexico.
It is a document with legal value that officially recognizes the measurements, the value of the land and the construction of the property.
It is an official document retained at the Registro Público that informs about the current legal status of a real estate property.
The seller must provide this certificate, which verifies, precisely, that there is no debt for the payment of this type of tax.
Cesión de Derechos is the act of taking over an existing Fideicomiso rather than creating a new one. This will depend on the length of the remaining term of the current Fideicomiso.
It is a registration document that is assigned to all people living in the national territory with a residency status, as well as to Mexicans living abroad. It is an alphanumeric code of 18 characters that is issued to individual people.
It is a legal agreement in which a third party temporarily retains a large amount of money or property as a guarantee until a specific condition is met, such as the fulfillment of a purchase-sale contract.
A Factura is a document of a commercial nature that reflects all the information of a transaction of purchase and sale of a good or the provision of a specific service. In fact, this is the only tax-deductible receipt in Mexico.
The Fecha de Cierre or Closing Date corresponds to the day the property is finally transferred to the buyer after all other documentation are final. This is also when the Título de Propiedad is signed.
Foreigners who purchase property within the Área Restringida must use a Fideicomiso in which to retain the property. However, as the property is not an asset of the bank, the buyer enjoys all its benefits directly.
Impuesto al Valor Agregado is the tax that residents pay when they buy any product or service, that is, it is a tax on their domestic consumption. It applies to both domestic products and those imported from abroad. In most of Mexico, this tax amount is equivalent to 16 percent.
Impuesto Predial is a tax paid annually with which a real estate property is taxed. It is a contribution made by residents who own a property, whether it is housing, land, an office, a building or a commercial premises.
This tax, as the name implies, applies to the acquisition of a unit of real estate and is roughly equal to or calculated at 3 percent of the value of the property.
A Notario Público is a licensed, certified attorney appointed by the government to act as the official representative of all parties involved in the purchase and sale transaction of a property. In fact, they not only represent those involved in this process, but they must also ensure that the lawyers of each of the parties uphold their obligation to protect the real estate investment.
This document, granted by the Notario Público and registered in the Registro Público de la Propiedad, contains all the rules and regulations for the development of a condominium complex, as well as related legal matters. Buyers will not be able to receive the Título de Propiedad until they register with this organization.
The RFC is critical to submitting any tax returns to the government. It is a unique alphanumeric key used by the government of Mexico to identify individuals (employees) and legal entities (companies) that carry out an economic activity—such as using a property for rental income—in the country.
The Registro Público is an office that maintains all the property records of all the properties that are in the municipality. The Título de Propiedad is not valid until the Notario Público has registered it.
This type of insurance is a form of compensation intended to protect the holder of financial losses if defects arise in the Título de Propiedad. Seguro de Título is an unnecessary expense if you hire a competent Mexican law firm.