Challenges of Buying a Home in Chelem

Introduction

We would like to preface this article by suggesting that anyone that has not yet been to Chelem visit, before considering a purchase. It's worthwhile renting here for in winter and summer, to see if you could get used to the heat and slower pace of life, long-term, not just for a quick vacation. While Chelem is a wonderful place, it isn't for everyone.

Land Trust - Fideicomiso

Mexican Law says that a foreigner cannot buy property within 100KM of the coast. In order to get past this law, Canadians, Americans and other foreigners have a lawyer create a 100yr land trust under their name called a Fideicomiso. Note that while while Chelem Beach is obviously within 100km of the coast, so is Merida.

While there is nothing particulayl difficult about getting your real estate lawyer to create this Fideicomiso (land trust), it does take time. At the time of writting of July 15 2024, it takes between 1 and 3 months for the banks to process and approve a Fideicomiso.

While this may be fine for the buyer, these 3 months can sometimes cause issues with the seller. Sellers not having previously sold to a foreigner are sometimes skeptical about this. Even a seller that at first seems ok with the wait time, may sometimes get impatient or take unsound advice from a friend and decide that this is some type of scam.

This is another reason for it being ideal to have Real Estate Agents representing both parties, so that they can confirm, without conflict of interest, that the land trust wait-time is normal.

Dual Economy of Chelem and the Yucatan

Amongst all the wonderful things one gains by moving to Chelem Yucatan, is the fact that your dollar goes further. Unfortunately, being a foreigner can sometimes work against you when making any kind of purchase here, and a home purchase is no exception.

Whether buying a home in Chelem or hiring a plumber, it is not uncommon for a local to quote you a different price than he or she might quote a local. This is the dual economy we're referring to.

The negative impact on Chelem Real Estate is that you can go through the process of drafting an offer on a property with both parties being on the same page about almost everything, but when the seller learns that the buyer is foreign, through the Fideicomiso (land-trust) conversation, they may change their selling price.

In June 2024, while representing a buyer, looking to buy a 33,000 sq.ft. parcel of land for 1 million pesos, we ran into this very issue. After a month of chasing the seller for proper documentation on the property and establishing a transaction method, as they were unbanked, they decided to increase the price by 20%, bringing the sale price to 1,200,000 pesos just because the buyers were foreign. They didn't even try to obscure their reasoning behind it.

This of course made the buyer angry, blew the deal and left the seller's real estate agent a little embarrassed that their client wasn't trust-worthy. But this is what can sometimes* happen in the Yucatan.

Negotiations in The Yucatan

When negotiating the purchase or sale of property, in Chelem, things can sometimes get illogical and very emotional when dealing with locals.

Unbanked Sellers of Chelem

You've most-likely heard of the term de-banked, especially if you've kept up with the Canadian Protests that occurred during COVID-19. To be de-banked however, you had to originally have a bank account to begin with.

Conclusion

In conclusion, we're of the opinion that Chelem has everything you would need as Home-Buyer leaving their home country and not wanting to compromise too much on the luxuries and habits that we've developed up north. And while there may be some hiccups during the purchase, a good Real Estate Agent can make sure you have the highest chance of success possible, while keeping you safe from scammers and people of lesser integrity.