CLOSING COSTS

Closing Costs: What to Expect

When buying property in Loreto, it’s essential to understand and budget for the closing costs involved. Unlike in the U.S. or Canada, closing costs in Mexico are typically higher, ranging between 5% and 8% of the property’s purchase price. Knowing what to expect will help you plan your budget and avoid surprises during the final steps of the purchasing process.

Key Closing Costs:

Notary Fees
The notary public plays a crucial role in the closing process in Mexico, and their fees typically range from 1% to 2% of the purchase price. They ensure that the transaction is legally valid and that the transfer of ownership is properly registered.

ISABI (Transfer Tax)
This municipal land transfer tax is approximately 2%-2.4% of the property’s value, paid at closing. It’s a mandatory tax that must be settled for the transaction to be legally completed.

Registration Fees
These fees cover the cost of registering the new property ownership in the Public Registry and typically range between 0.5% and 0.7% of the property’s purchase price.

Fideicomiso Setup Fee
For foreign buyers purchasing property within Mexico’s restricted zones, the fideicomiso (bank trust) setup fee typically costs between $550 and $900 USD, depending on the bank. This is a critical step for securing your ownership rights in Loreto.

Attorney Fees
Hiring a closing attorney is essential for ensuring that all legal aspects of the transaction are handled properly. Attorney fees generally range from $2,000 to $4,500 USD, depending on the complexity of the transaction and the attorney’s rates.

Escrow Fee
The escrow company holds your funds safely during the transaction. The average escrow fee is around $650 USD, typically paid when the escrow account is opened.

Other Costs
Additional fees may include the first-year annual fideicomiso fee (around $550 to $900 USD), Secretary of Foreign Affairs permit fee (approximately $1,000 USD), and potential costs for power of attorney services, notarization, and translation services if needed.

Budgeting for Closing Costs
It’s important to remember that closing costs fluctuate slightly due to currency exchange rates. The property’s purchase price is agreed upon in U.S. dollars, but the transaction is registered in Mexican pesos based on the exchange rate on the day of closing. Your closing attorney will provide an estimate of all costs, but be prepared for a bit of variation.

For a comprehensive breakdown of closing costs, including a detailed chart including each expense, be sure to download the Ultimate Loreto Real Estate Guide. Inside, you’ll find the tools to help you estimate the closing costs for any property you’re considering. Plus, everything you need to navigate the buying process with confidence—from submitting an offer to closing.