6 Myths About Buying Property Along the Sea of Cortez Debunked
Thursday, June 20, 2019
There’s a housing boom south of the border. Celebrities, millionaires – you name it – everyone wants to own Sea of Cortez real estate. Where exactly is the Sea of Cortez? It’s a narrow strip of water that separates Baja California Peninsula from Mexico’s mainland. More specifically, it’s the body of water that surrounds popular cities like Cabo San Lucas and San Jose Del Cabo, where property is a hot commodity.
Whether you’re looking for a new home, a vacation getaway, or a rental property, there are a lot of reasons to buy Sea of Cortez real estate now. However, the buying process is wrought with myths. Buying property in another country, especially high-end properties, can be a challenge if you don’t have the right information. To make sure you’re armed with the correct intel, we’ve debunked six common myths surrounding Sea of Cortez real estate:
Myth: Foreigners can’t buy property in Mexico
There are laws in the Mexican constitution that say foreigners can’t buy property in “restricted zones,” which is any land near the border or water. However, Mexico’s foreign investment law allows foreigners to buy property in these restricted zones as long as it’s purchased through a bank trust called a fideicomiso.
Here’s what you should know about it:
- A fideicomiso is a real estate trust held by a local Mexican bank of your choice.
- The bank acts as a trustee, but the buyer has complete control of the property.
- As the buyer, you can lease, rent, sell, improve, and will your property as you wish.
- The trust is for 50 years, but can be renewed for additional 50 years at any time.
Foreigners are welcome to buy property in Mexico, but a trust is necessary to accomplish it.
Myth: The best Sea of Cortex real estate is along the ‘Tourist Corridor’
When you’re ready to look for a home near the Sea of Cortez, you’ll hear a lot about the ‘Tourist Corridor.’ It’s a strip of land that runs between two of Baja’s most popular cities: Cabo San Lucas and San Jose Del Cabo.
There are a lot of luxury homes spread across the coastline there, many of which overlook the Sea of Cortez. When you speak with a realtor, he or she will undoubtedly suggest property in that area. The corridor is popular, upscale, and offers a lot of amenities, but it’s also crowded and busy.
Some of the best Sea of Cortez real estate is located in the East Cape. This region, which sits northeast of the corridor, offers homes of unparalleled luxury with breathtaking views and sugar sand beachfront private residences.
This is the quieter side of the peninsula, where locals run the restaurants, sell goods from upscale boutiques, and embrace new residents as one of their own.
The area is developing quickly. Several glamorous resorts are now in the East Cape, and they’re attracting high-end buyers from all over the globe.
Owning a home at the Four Seasons Private Residence Costa Palmas, for example, is the epitome of luxury. You can customize a private villa that’s nestled in the sand dunes and steps from the sea, or select a turnkey, beachfront casita that showcases the area’s natural beauty.
As you narrow your housing choice, make sure you tour every option available – not just those along the corridor.
Myth: Sea of Cortez real estate options are all listed online
Home buyers in the U.S. look for listings online; it’s the first place they look. Listings are shared across multiple sites, making it easy to see (just about) all of the inventory available.
In Mexico, that’s not the case. Realtors say there are “a lot of pocket listings,” meaning some sellers work exclusively with a certain realtor or some owners even try to sell their home themselves.
What does that mean for a motivated American buyer? You need help. You can’t rely on online listings, you need an experienced agent who has working knowledge of the homes that are on the market, especially if you’re looking for a high-end home.
Ideally, you’ll plan a trip to tour several Sea of Cortez real estate options. Odds are, you’ll see a handful of East Cape homes for Sale that aren’t listed online and that only real estate agents know about.
Myth: There’s limited inventory for high-end buyers
VIP buyers that want next-level living won’t be disappointed with the available homes for sale along the Sea of Cortez. Ultra-luxury homes are one of the fastest growing real estate sectors in the area.
In 2017, there were 27 sales of homes over $1 million. Just one year later, the number more than doubled. In 2018, 58 million-dollar-plus homes were sold, according to Coldwell Banker.
To meet demand, more upscale houses are being built. These private, customizable homes combine elegant living with elite amenities. Homes are situated near membership golf courses, 5-star restaurants, private beach clubs, and marinas.
Homebuyers looking for the best-of-the-best in Sea of Cortez real estate have many, many options to choose from.
Myth: Buying a small plot of land doesn’t require a realtor
Some homebuyers want to build their dream home from the bottom up. To do so, you have to buy a piece of land first.
Buying land seems like a simple transaction, but in Mexico, land scams are common.
A common scam is to put a “for sale” sign on a piece of raw property that can’t be sold. The property, known as ejidal, is an area used for communal agriculture. While the land can’t be sold, it doesn’t stop scammers from advertising the land for a great price in hopes that a buyer will hand over cash. The scammer keeps the cash, but the buyer never gets the land.
These kinds of scams are uncommon in luxury areas like Sea of Cortez real estate, but it’s still an important lesson. No matter what kind of property you want to buy, even if it is an empty plot of land, it should be purchased with the help of a real estate team.
Myth: Applying for residency is a challenge
You don’t have to apply for residency in Mexico before you buy a home. However, if you plan to live in Mexico full-time, you’ll eventually need to apply. While many people assume the application process is a nightmare, that’s not the case.
The process starts at the Mexican embassy in your country of origin, where you can obtain a visa. This allows you to enter the country with the intent of becoming a resident. Once you’re in Mexico, you must fill out an application and pay a fee.
You also have to submit some paperwork, like birth and marriage certificates, proof of income, and other necessary documents. After a ten-day period, you’ll get your fingerprints taken. Once approved, you’ll get an ID card that serves as proof of residency.
It does take a little work, but compared to the application process in other countries, it’s a fairly straightforward process.
Plan Your Visit to the Sea of Cortez
Many travelers have visited the southern tip of Baja and fallen in love with the area, so much so that they’re willing to buy a home there. Property along the Sea of Cortez offers unmatched beauty and an elite lifestyle that’s hard to find elsewhere. The real estate market reflects the demand for high-end property, and will likely continue to grow as more buyers seek affluent homes in the area. If you’re looking to buy, understanding these myths is a good starting point in the buying process.