Closing On Your Home Quickly In Mexico!
Video Transcript - (Speakers: Alex Koper & Anthony Young)
Anthony: It's Anthony Young over here at MoXi, and I'm taking a very special opportunity to talk with our CEO, Alex Koper, about some common questions that I'm getting from my clients concerning buying real estate in Mexico. Very happy to have Alex set some time aside today to answer some of those things.
Alex: Well, awesome. I'm really excited to be here. Thanks so much for setting this up, Anthony. This is going to be fun. I don't often get to hear every day what are common questions clients and potential clients have about what we do. So pretty excited to hear about those.
Anthony: The question a lot of folks ask me is, what can I do as a borrower to close my transaction more quickly? Understanding that legal property transfer takes longer and there are certain things that are out of MoXi's control as a lender. How would you answer that question?
Alex: That's a good one, and I think our client has a lot to do, can have a lot to do with how long and how easy that transaction can be. So number one, first and foremost, is to make sure that the client is an active participant in the transaction. So when MoXi reaches out, looking for specific documentation either about the property itself or about the underwriting process, like a pay stub or tax return or power of attorney, that the client get back with us right away or address the need as quickly as they possibly can or reach out if they have a question.
I think the other part where the client can really be impactful is to have good representation and a good understanding of whether the property that they're writing an offer on and are buying can legally be conveyed. So MoXi's not going to be party to a transaction that might be what's considered to be like a soft closing because that's not a legal closing and then the client doesn't actually own what they're paying for. And unfortunately, that's more common than you might think. So understanding upfront that the person selling the property is the actual legal owner of the property, that the property, if it's subject to condo regime, that condo regime is properly duly recorded with the public registry, that if it's new construction or recently constructed or remodeled, that construction is manifested. And those sorts of things that might seem unique, different, and interesting, but those are the details that we sweat in order to ensure that the property can be legally conveyed. And so looking into those components and or aspects before you get too far down the road would be a really important piece.
I think the other area that really impacts cycle times and efficiency is ensuring that the client appoints a power of attorney to sign on their behalf for the closing, and that is for most transactions at MoXi a requirement, but getting that power of attorney notarized and apostilled according to the instructions that are given and having that power of attorney be ready to do the closing when all parties are ready. I think what people don't always understand is that a closing in Mexico requires all of these different third parties to come together around a closing table or to send a representative to come together around one table with a wet signature in order to convey and do a legal closing in the country of Mexico.
And that's all sort of orchestrated by a notario, but it involves the seller or their representative, the buyer and or their representative, the lender. It involves a number of other parties that are required, including the fiduciary. And so when you have to coordinate all of those people coming in, there are flight delays, there are illnesses, there are this there or that, getting everyone back to the table after a rescheduled closing can be very difficult. So appointing a power of attorney right out of the gate, someone that the client trusts, that's local in Mexico, that can attend the closing any day without having to get on an airplane is a really good idea. That doesn't mean that clients can't attend the closing, get their keys, and all of those sorts of things, but it ensures that the closing can take place when all parties are ready and doesn't need to be rescheduled. So I think those are just a couple of ways where I think clients can really be helpful and impact the process positively.
Anthony: Thank you. That's a great answer. One thing that a lot of folks don't know is that you have to sign in blue ink. Everything in Mexico has to be wet signature blue ink at the time of closing. And that's a little different, but.
Alex: Yeah, not a lot of digitization in the signature area in Mexico. I think the other thing people might not know is, any sort of legal document that's based or that's executed in a foreign country, meaning in the United States, has to be apostilled. And so MoXi does have a vendor that expedites apostille stamps for all 50 states in the US. But any document such as a trust, an LLC article or organization, a power of attorney, any of these documents that are likely going to be required for most transactions have to be, if they're created in the United States, which they must and which they are for a MoXi transaction, they have to be notarized, they have to be apostilled, and then they have to be translated when they come back to Mexico by a certified translator. And so that's something that can be done with relative ease given MoXi's vendor relationships, which is kind of cool.
Anthony: What I'm hearing is the importance of having someone's ducks in a row essentially. Now, can somebody close alone under a trust on the US side? You mentioned a trust that could be apostilled and notarized and so forth. What would be maybe some benefits of that? Or is that very common? What instances would someone use that?
Alex: Yeah, great question. So MoXi allows vesting in any US approved US entity that the client would like as it relates to financing and investing of the property. So where it can get a little confusing is that a fideicomiso is often roughly translated to trust in English. So that's going to happen regardless if you're a foreigner and you're buying in a restricted zone. If you're working with MoXi, you're always going to have this fideicomiso. So it's called a fideicomiso de garantia, and that's the warranty or guaranteed trust, but that trust is going to have beneficiaries and what will be MoXi as far as the lien is concerned, that's how the lien, the mortgage lien is recorded, and the others will be either individual names, foreigner names, or an entity. So that could be a trust, a family trust, it could be an LLC, it could be a corporation created for real estate purposes specifically, and those are very common.
A lot of clients choose to vest their interest in their Mexican property in an LLC, in a trust, in a corporation, and that's absolutely fine. Those documents in addition to the power of attorney that we talked about a few minutes ago, but those documents would need to be, so articles of organization, the trust document itself if it's a family revocable trust as an example, those documents need to be notarized, they need to be apostilled. And then when the originals get sent to Mexico, we would have them translated to Spanish and then they get recorded in the transaction. So it's all done very, very legally and properly, but that all has to be completed in order for the transaction to settle legally and ensure that the client, again, owns what they're paying for. And those are some of the things that we take really seriously, that clients really appreciate. Right? They know that they're going to end up with legal ownership and a secure transaction the best way they can. Yep.
Did you know that MoXi funds & services loans in USD, is regulated and audited in the US & Mexico, and ensures compliance throughout the term of your loan?
Try our MoXi Mortgage Estimator