Mexico Real Estate Terms

Reservation Fee (Earnest Money) — Apartado

A small deposit to temporarily reserve a property in Mexico while contracts are prepared. Usually fully refundable (around $1,000–$5,000 USD), depending on the seller.

Escrow — Cuenta de depósito en garantía

Neutral third-party account that holds funds until all conditions of a sale are met (common in the U.S., not typical in Mexico). This is why it’s important to work with professionals who specialize in working with foreigners.

Offer Letter — Carta de oferta / Carta de intención de compra

A written offer from the buyer stating price and terms.

Down Payment — Enganche / Pago inicial

The first major payment toward the total property price, typically 20–25 %.

Purchase Agreement — Contrato de compraventa

The legally binding sales contract between buyer and seller.

Due Diligence — Revisión legal / Debida diligencia

Verification of property ownership, permits, and legal status before signing.

Appraisal — Avalúo

Official report that determines the property’s current market value.

Title Search — Estudio de título / Búsqueda de propiedad

Legal review ensuring the property is free of debts or liens.

Notary Public — Notario Público

In Mexico, a government-appointed authority who legalizes and records real estate transactions.

Title Deed — Escritura Pública

Final registered document proving ownership of the property.

Closing Costs — Gastos de cierre

All fees paid at completion (notary, legal, taxes, registration). Around 7–8 % in Mexico.

Delivery Date — Fecha de entrega

Scheduled day the property is delivered to the buyer.

Possession / Delivery of Keys — Entrega de llaves / Posesión

Moment the buyer receives physical access to the property.

Fideicomiso (Bank Trust) — Fideicomiso

Required for foreigners purchasing within 50 km of the coast or 100 km of a border in Mexico.

Power of Attorney (POA) — Poder notarial

Authorizes another person to sign or act on your behalf during the transaction.

Closing — Cierre / Firma

Final step when ownership is officially transferred and registered.

Wire Transfer — Transferencia bancaria

Electronic transfer used to send reservation fees, deposits, or closing funds.

HOA Fees — Cuotas de mantenimiento

Payments that cover maintenance of shared areas and amenities.

Property Taxes — Impuesto Predial

Annual municipal tax on property ownership (much lower in Mexico).

Property Insurance — Seguro de propiedad / hogar

Protects the property against damage, theft, or disasters.

Post-Closing Services — Servicios post-cierre

Includes transferring utilities, registering with HOA, and furnishing setup.

Levantamiento Topográfico (Survey / Topography Study)

Professional land survey defining boundaries and lot size. Required for new constructions, land purchases, or title clarification.

Uso de Suelo (Land-Use Permit)

Municipal certificate specifying what type of construction or activity is legally allowed on the property.

Licencia de Construcción (Construction License)

Municipal authorization required to build, remodel, or expand a property. Always verify that the developer or owner has an active license.

Régimen en Condominio (Condominium Regime)

Legal document dividing a property into private units and shared areas; required for condominium closings.

Reglamento de Condominio (Condo Bylaws)

Rules governing property use, rentals, and maintenance fees within a condominium.

Acta de Entrega (Delivery Report)

Document signed when a new property is delivered to the buyer, listing condition and pending repairs.

Constancia de No Adeudo (No-Debt Certificate)

Verification that property taxes, utilities, and HOA fees are fully paid.

Certificado de Libertad de Gravamen (No-Lien Certificate)

Official proof from the Public Registry that the property has no liens or encumbrances.

Apostilla (Apostille)

International certification validating foreign documents (IDs, POAs, corporate papers) for use in Mexico.

Perito Traductor (Certified Translator)

Court-authorized translator who provides official Spanish translations of foreign documents used during closing.

Terminación de Obra / Habitabilidad (Completion or Occupancy Certificate)

Municipal certificate confirming construction meets legal and safety standards—required for new builds.

Exclusive Listing — Contrato de exclusividad

Agreement giving one agent or brokerage the right to market and sell the property.

Offer & Negotiation — Oferta y negociación

Process of reviewing and adjusting offers until both parties agree.

Accepted Offer / Under Contract — Oferta aceptada / Bajo contrato

When the buyer and seller sign the purchase agreement.

Inspection — Inspección / Revisión de la propiedad

Evaluation of the property’s condition (common in the U.S., less common in Mexico).

Closing Statement — Estado de cierre / Hoja de liquidación

Final summary showing credits, debits, and total payout at closing.

Notary Public — Notario Público

Handles legal documentation and ensures compliance in the sale.

Delivery of Keys / Possession — Entrega de llaves / Posesión

When ownership and access officially transfer to the buyer.

ROI (Return on Investment) — Retorno de inversión

Percentage of profit earned compared to the investment amount.

Rental Yield — Rendimiento de renta

Annual rental income as a percentage of the property’s cost.

Cap Rate — Tasa de capitalización

Used to estimate profitability of a rental property.

Pre-Sale / Off-Plan — Preventa

Buying during construction, often with flexible payment terms and better prices.

Turnkey Property — Propiedad llave en mano

Fully furnished and ready to move in or rent.

Capital Appreciation — Plusvalía

Increase in property value over time.

Property Management — Administración de propiedad

Service that manages maintenance, cleaning, and rentals.

Short-Term Rental — Renta vacacional

Renting for short stays (e.g., Airbnb).

Long-Term Rental — Renta a largo plazo

Lease agreements of six months or longer.

Rental Agreement — Contrato de arrendamiento

Legal contract defining terms of a rental.

Lien — Gravamen

A legal claim on a property due to unpaid debts or taxes.

Mortgage — Hipoteca

A loan secured by the property. In Mexico, mortgages are available mainly to Mexican nationals, dual citizens, or through select international programs for foreigners.

Foreign Investment Permit — Permiso de la SRE

Required for foreigners to buy property in Mexico.

RFC (Tax ID) — Registro Federal de Contribuyentes

Tax identification number required to own or sell property in Mexico (similar to a Social Security Number in the U.S.).

CURP / INE — Identificación oficial mexicana

Official ID used for legal transactions.

SAT (Tax Administration Service) — Servicio de Administración Tributaria (SAT)

Mexico’s federal tax authority, similar to the IRS in the U.S.

It oversees all tax matters, including property sales, capital gains, and exemptions.

Buyers and sellers must have an active RFC registered with SAT to complete a transaction.

Residency Status — Estatus de residencia (temporal o permanente)

Determines a foreigner’s legal status for property ownership.

Dual Citizenship — Doble nacionalidad

Allows ownership in restricted zones without a fideicomiso.

Beneficiary Clause — Cláusula de beneficiarios / herencia

Specifies heirs or beneficiaries in the event of the owner’s passing.

Capital Gains Tax (ISR) — Impuesto sobre la ganancia de capital

Tax on profit from selling a property in Mexico, calculated on the difference between purchase and sale price.

Primary residences may qualify for exemption if requirements are met (RFC, CURP, SAT registration, and proof of residency).

Tax Exemption Certificate — Constancia de exención ISR

Document issued by the Notary and SAT confirming exemption eligibility.

Predial (Property Tax) — Impuesto Predial

Annual municipal property tax—much lower in Mexico than in the U.S.

Tax Assessment Value — Valor catastral

Official government-assessed value used to calculate Predial and other property-related taxes.

Accountant / Tax Advisor — Contador público / Asesor fiscal

Professional who helps manage filings, capital gains, and annual property tax obligations.