to buy or not to buy

I own a house in Oregon.


I rent a house in Villa Obregon. 


Three years ago, I would have told you there was something wrong with that picture.  I intended to sell the Oregon house in 2009 and to buy a house on the Mexico Pacific coast.


The spirit of "irrational exuberance" put an end to that plan.  There was simply no market for my house in 2009.  And if it did not sell, I could not buy into the Mexican Dream.


Like almost everything in life, that change in plan turned out just right.


During the past year, I have lived in two houses in Villa Obregon.  A house sit on the beach, and a rental on the laguna.  With the freedom to pick up and move whenever I choose.

Last week, I received a copy of a survey conducted by the International Community Foundation: Housing and real Estate Trends among Americans Retiring in Mexico's Coastal Communities."


I am a sucker for these studies.  Anything that purports to be scientific attracts my moth-to-light attention.


And this study is full of interesting tidbits.


As an example, the report authors were surprised that only 37.4% of the expatriates surveyed felt that locating in a planned unit development was either "very important" or "somewhat important."


I am not certain why they found that to be surprising.  My experience has been that most Americans who move to Mexico do so to get away with some aspects of planned societies.  As a group (and the stereotype is no more accurate than most), they tend not to be an Average American -- in politics, social mores, lifestyles.


The old adage has some truth to it.  Half of the Americans in Mexico are not wanted in the United States.  The other half are.


In my beach community, most of my acquaintances do not want to hang around other expatriates.  The idea of a "planned unit development" would evoke another chorus of ticky-tacky.


The irony, of course, is that some of the most vocal opponents of gated communities live behind walls that rival the Alamo.  Yours truly included.

If you want to read the full study, you can find it at: http://www.icfdn.org/publications/housing/index.php.


I eventually decided not to buy in Mexico -- even if my house does sell.  But the report provides some interesting tip for people who do decide to buy.

• Do your homework before buying. Familiarize yourself with Mexican laws and regulations, which are quite different than the laws of the United States. Don’t assume that laws are uniform across Mexico as real estate conventions, laws and costs for closing vary on a state-by-state basis, just like in the U.S.

• Make sure that you have been provided all pertinent disclosures specific to the property you are purchasing including non lien certificates, proof of property tax payment, condo regime documents, legal suits or other legal actions that might otherwise impact your property title.

• In coastal areas, make sure that the property you are purchasing is in a development that is in compliance with the Mexican Federal law for mangrove protection to avoid possible legal actions.

• Make several trips to your retirement destination of choice before making a decision to buy.
   
• Don’t try to do a deal on your own. Retain licensed Mexican and U.S. real estate agents, attorneys, and accountants.

• Get title insurance. Make sure the seller has clear title.

• Require that all documents to be translated into English and read them carefully.

• Place deposits in a neutral, third-party escrow account.
   
• If you own coastal property in Mexico through a Fideicomiso, your trust must be reported to the U.S. Internal Revenue Service to avoid potential tax penalties. For additional details on IRS rules and guidelines on foreign trust reporting requirements please refer to: http://www.irs.gov/businesses/international/article/0,,id=185295,00.html
   
• As in any country, including your own, if it is too good to be true, it probably is.