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The complete checklist for buying a house in Cabo

When buying a second home in Cabo San Lucas, international buyers must be aware of the different steps and requirements of the buying process to avoid delays in closing.

This buying a house checklist is meant to familiarize international buyers with the nuances of the laws and practices that govern Los Cabos, Mexico real estate. Save time and avoid the common pitfalls of buying property in one of the most coveted housing markets in the world.



Finding Los Cabos houses for sale

The first step in the home buying process is choosing a property. Cabo offers an excellent selection of single-family homes, townhomes, and condos. The most coveted homes in the municipality are beachfront properties that provide direct access to the water.

To find a property, explore the Cabo MLS for a bird’s eye view of the real estate market.

Some of the most sought-afterneighborhoods in the area include:

  • Cabo San Lucas – Known for its vibrant nightlife, world-class restaurant scene, and big game sport fishing, this section of town is what immediately comes to mind whenever Cabo gets mentioned.
  • Corridor – Home to Cabo’s luxury seaside resorts, which dot over 20 miles of pristine shoreline between Cabo San Lucas and San Jose del Cabo, this neighborhood offers the ultimate vacation lifestyle.
  • Marina – This waterfront neighborhood offers some of Cabo’s finest water-based activities through companies that offer fishing charters, close whale encounters, parasailing, and helmet diving tours.
  • Medano Beach – Bustling with activity, this neighborhood is characterized by luxury high rises, waterfront dining, and a beach where residents can go kayaking and wave running.

A local expert like Andrew Lemke can help choose a home and neighborhood that fits your lifestyle.

International buyers and the Restricted Zone

Although Los Cabos falls under the Restricted Zone, buyers of all nationalities can purchase, hold, and sell real estate in the area. The Foreign Investment Law allows foreigners to own an indirect title to land in the Restricted Zone either through a Bank Trust, locally known as Fideicomiso, for residential property, ora Mexican corporation for commercial property.

WithFideicomiso, the government issues a special permit to the Mexican bank of your choosing, assigning that bank as the buyer. Your bank will act as the trustee, with you are the beneficiary.

This arrangement is more than a lease agreement. Rest assured that the home you purchase will be placed in a trust under your name. You will have exclusive rights to the home, including the right to sell, make improvements, and even rent it out without penalties.

The term for the trust is 50 years, but you can renew it for another 50-year period in the last year.  Renewals can be repeated indefinitely and even passed on to your heirs, who can have long-term control of the property through your will.

Professional support

There’s simply no substitute for buyer representation when buying property in a foreign country. A Cabo real estate expert will guide you through your options in the housing market, as well as introduce you to the customs and practices of the area.

In addition to a real estate advisor, you must also work with an interpreter if you don’t speak the language. Have all the documents translated into English, and bring an interpreter to face-to-face meetings.

You’ll also need the services of a Mexican lawyer who can give you professional advice based on the laws and regulations of the land.

Assembling a team of experts will help protect your interests throughout the buying process.

Get in touch with luxury real estate expert Andrew Lemke today for guidance.

Proper documentation

Record the purchase price of the property with the corresponding government agency. It is important to record the true purchase price of the home – some real estate companies record a lower purchase price in hopes of saving taxes for the clients on the 2% acquisition tax. However, this practice will hurt your investment in the long run, as you might have to shoulder the seller’s capital gains tax liability if you decide to sell the property later on.

Puttingtheaccurate purchase price on record with all the necessary documentation is will help you maximize potential profits.

Your real estate advisor will ensure that the purchase price is listed accurately by overseeing the creation of your trust from start to finish. They will examine all the documents, as well as find the current exchange rate, in order to do this.


Closing costs often amount to 6% to 8% of the purchase price. These costs are separate from your earnest money deposit and will be added to the total amount needed to close the deal. Your closing costs may also vary depending on the exchange rate during the period in which you close.

The closing agent will set up an escrow account once your offer has been accepted. The funds for the purchase, including closing costs, loan proceeds, and remaining down payment will be deposited into this account before closing.

Aside from the closing cost, you must include the following fees, permits, and documents in your checklist:

  • Bank trust fees – These include the trust acceptance fee, a one-time feefor setting up your bank trust, and the trust first year fee, which is used to maintain it.The latter must be paid in advance.
  • Foreign affairs permit– You must secureaSecretaría de RelacionesExteriores (SRE)permit, which the trustee bank will process through the closing agent to allow you to purchase property.

There’s also the National Foreign Investments Registration/ RegistroNacional de InversionesExtranjeras (RNIE)permit, with which the trustee bank must register the deed within 30 days of issuance.

  • Property acquisition tax/ImpuestoSobreAdquisición de BienesInmuebles (ISABI) – A fee to be settled with the municipality. Your real property transfer tax amounts to 2% of the purchase price.
  • Public Registry Rights/ RegistroPúblico de la Propiedad y Comercio (RPPC) – The fee for this permit is based on the sales price. Once paid, the notario will process your property’s registration with the Local Public Registration Office.
  • Property survey/Deslinde – Thisdocumentshows the property’s physical features and boundaries.
  • Notario fees
  • No liens certificate
  • Appraisal for tax assessment/Avalúo

Come one step closer to buying your dream home in Cabo. Contact real estate expert Andrew Lemke here to get started.