[MangoTango]

I'll cut to the chase. My house is for sale and today I received a 'proposal' (not quite an offer).

The buyer is proposing to pay virtually half the amount in pesos and half the amount in dollars.

I would like the dollars but not if I have to bring them into Mexico and exhange them for pesos (there is a chance I may end up back in the US).

Do you think they can somehow deposit the dollars into my US account (and still keep Mexico happy).

I've already spoken with Citibanamex and there is no way for me to 'store' dollars with them.

Anyone have any other ideas ?

 

[Jreboll]

Whatever you do be discreet with your transactions. Have your plans well thought out and don’t flash money around.

 

[citlali]

no kidding, this is how you get kidnapped for ransom and killed although the ransom is paid.. This happened to a couple of women here in Ajijic because one of them s husband sold a house. The kidnappers took the wife and the niece, killed them very quickly and asked for a ransom.. The husband paid the ransom but the women were already dead.

 

[dembones]

Why would u do that? Trying to scam paying taxes? Why go thru trouble. Get your $, get out of dodge, pay what u may owe. Seems shady they wanna do that. Plus what previous poster said...

 

[Takingiteasy]

Why cant the buyer convert the dollars into pesos and pay all in pesos? That seems to be what you want. Of course if you then move to the states you will have those pesos losing value vs the dollar and have to change back.

The other possibility is set it up just as they want it, have them send dollars to your usa account and pesos in mx account. Why would that be a problem? If you declare both parts of the payment and pay taxes, why would mexico object? Probably no one here has been in the exact situation but it seems like the notario could say si or no. If no one can come up with a law against it, it must be ok

 

[citlali]

Why can t they wire the dollars to your account in the US and pesos to your acount in Mexico.. What is the big deal?

 

[surabi]

As far as I am aware, when you sell a house in Mexico, regardless of the currency it is paid in, the amount is calculated in pesos, so you end up having a currency conversion anyway.

A friend went through that- the buyer was willing to pay in dollars, and my friend assumed her sale price would be the amount they had agreed on, but lost money when the calculations into pesos was done.

 

[Jreboll]

This discussion merits being looked at from a safety point of view. Not knowing the buyer and the other intermediaries personally puts a certain degree of risk to this transaction. The exchange of money has to be looked at logistically so that the OP comes out of this safely.

 

[eastwind]

When I bought my condo the price was agreed in dollars, and the transfer of the main money was from my US account to the seller's US account. But yes, for taxes and fees, the Notario used a coversion rate to pesos and assessed taxes and fees based on that. That conversion rate got set the day of closing or the day before. Since the dollar strengthened markedly between the agreement and closing, the purchase price in pesos went up, and it cost me a tiny amount on fees and the seller theoretically made more on the deal and therefore had to pay more in taxes. It was no windfall for the seller, because they were using the proceeds to buy oceanfront land near Cancun which was priced in dollars as well. The seller of that land made a peso windfall.

Always care has to be taken to negotiate and conduct the transaction so that there's no risk of it half-way going through, since usually an escrow company is not used, and typically the transfer goes direct from buyer to seller.

In my case I brought my laptop to the notario's office and wired the money (which has a 30-minute "undo" window) with all present and watching, and during that 30-minute undo window the seller signed the papers. The Notario held onto the signed papers until the money got finished moving and landed in all the proper accounts. One of my wires was a transfer I made direct to the Notario (dollars converted to pesos) to pay his fees plus the taxes owed by the seller (which I paid for, but which reduced what I transferred to the seller, so the seller got his net and the Notario had the money for the taxes for sure before it was all validated).

The whole thing is kind of tricky and can be screwed up and caution is necessary for sure.

 

[MangoTango]

I just had a 2 1/2 hour meeting at my coffee table on the patio with I think 8 people. And then we conferenced in my lawyer. Several of these people already knew each other. It was a very friendly gathering and I think everyone is happy. I have zero safety concerns.

The buyers were some of the nicest people I have met in a long time. Totally agreeable. The mother (the obvious jefa) is willing to wire as many dollars I would like from her US bank to my US bank (we actually have one bank in common). The remaining monies will get wired into my Mexican account.

One of my concerns was how much time I would be allowed to leave the house. I explained some of my thoughts as to where I might end up and the timeframes involved. The woman said - no problem take until December if you need.

Another of my concerns was what I would do with some of the larger pieces of furniture etc. I mentioned that and the husband said - I really like that table (I have a rather large dining room table we had specially made for a large room). I mentioned some other things (like a large horizontal freezer) and they seemed interested. We just need to put a fair value on some things.

Sorry @eastwind - you just posted at this very moment - I'll read your post when I get my thoughts down.

So - the lawyer (who I trust impeccably) is already aware of the discussions, monies involved. He has already had a discussion with the notary (the buyer has agreed to use the notary I want) and the Notary has already laid out what the escritura will likely look like. The lawyer said I likely will not owe Mexico any taxes at all. (I am truly blessed that I can pick up my phone and call important people and they stop whatever they are doing and have these conversations - I have an angel).

If I understood correctly - the lawyer recommended the buyer wire half the purchase price to my US account NOW as a deposit. I was surprised by that (and I'm not so sure I would agree to that if the shoe was on the other foot).

So - I'm a little wound up at the moment....

 

[citlali]

You will not owe any taxes because your profit with be less than 4 million pesos or ther notario has a way to lessen the profit without facturas?

 

[MangoTango]

You will not owe any taxes because your profit with be less than 4 million pesos or ther notario has a way to lessen the profit without facturas?

The ink is not yet dry on the escritura which was written for when my wife passed. I realize that in Mexico it is the buyer who gets to choose the notary - but all along I told my realtor - I'm not going to agree to any deal which does not include the notary who just wrote up my escritura. He did a good job, his fees were very reasonable and he has a good reputation.

When it came up in our backyard meeting this week, I mentioned my wishes, it was their realtor who mentioned - oh that is a good notary, he has very reasonable prices - the buyers said no problem and that was that. We will meet in the notary's offfice first thing Monday to sign the paperwork.

As for the taxes - I was provided two options. They provided spreadsheets. In one I was to pay virtually no taxes (really really small). When my lawyer presented it he said - but EVERYONE will be much happier if you agree to this other option instead. With it I will pay a little more taxes - but everyone will be happy and there will be no sweaty brows going forward.

The thing that hurts a little is the 5% comission I will owe the realtor - considering the really little bit of effort she had to put out to sell my house. BUT - I guess a deal is a deal - and I assume she will likely have to split that comission with the buyers realtor. But I have no idea. One thing that I found a little odd was that 5% was not mentioned on the notary's scenarios. I will pay taxes on the sale price, not the sale price less the comissoin. Then - when I pay the realtor I will again have to pay a VAT (what is that 16% ?) on those monies again. Doesn't seem right.

 

[eastwind]

Handling the realtor fee as a side payment reduces the escritura value which reduces the taxes you pay and the annual predial of the buyer. As I understand things, that's a "legitimate" way to reduce the taxes (as opposed to simply under-reporting the sale price).

If the realtor is honestly paying her taxes, then she'll want to charge you the 16% so she can pay that to the government and give you a proper factura for that payment.

The 16% on top of the 5% means you're paying a 5.8% commission, net. I think that's kind of high, but it's water under the bridge now. In the US you pay 6%, but it gets split at least 4 ways - your real estate agent takes 3% and the seller's agent takes 3%, but they each have to pay part of that to their company, so each agent is getting about 1 to 2% for their work, depending on their individual deal with their "broker" (the person with the broker license running their office).

Your agent found you a good buyer, and very quickly. So maybe she's worth it.

 

[Takingiteasy]

Your lawyer saying everyone will be happier if you pay more, does not sound right to me. Unless its illegal you should take every break you are entitled to. If it were me I would run it by another lawyer just to make sure. Corruption among lawyers and others is commonplace.

Its like when the doctor says you need a major operation. You don't just jump on the table, you get a second opinion

 

[MangoTango]

Thank you for your concern - but just as I have no issues with safety - I have impeccable trust in both the lawyer and the notary (but the lawyer in particular). We have worked together a lot over the last 7-8 months. And the person who brought us all together is like a brother (actually maybe even better). These people have a deep understanding of what I have been through and are doing their best to help - so I can get on with my life. Of that I have no doubt.

 

[citlali]

Congratulations and on to the next step in your life, ow you are as free as a bird..

 

[eastwind]

Congratulations and on to the next step in your life, ow you are as free as a bird..

Naw, birds don't own 3 cats.

 

[surabi]

One thing that I found a little odd was that 5% was not mentioned on the notary's scenarios. I will pay taxes on the sale price, not the sale price less the comissoin. Then - when I pay the realtor I will again have to pay a VAT (what is that 16% ?) on those monies again. Doesn't seem right.

If everything about the deal is on the up and up, it sounds like you are just misunderstanding. A realtor's fees have nothing to do with the actual costs of the sale, and wouldn't be accounted for on the notary's paperwork.

It's like if you are looking for a good used car and employ the services of someone who finds cars for people. The car transfer paperwork will include the sale price, govt. transfer fees, new plates, etc. But the finders fee for the guy who tracked down a good used vehicle that met your specifications is a separate deal, you are paying him privately for a service he offers.

If you are being asked to pay the 16% IVA on the sale price twice, there is definitely something wrong there. But you will need to pay 16% IVA on the realtor's fee, as that is required on all goods and services in Mexico, unless money is changing hands under the table.

 

[MangoTango]

If everything about the deal is on the up and up, it sounds like you are just misunderstanding. A realtor's fees have nothing to do with the actual costs of the sale, and wouldn't be accounted for on the notary's paperwork.

It's like if you are looking for a good used car and employ the services of someone who finds cars for people. The car transfer paperwork will include the sale price, govt. transfer fees, new plates, etc. But the finders fee for the guy who tracked down a good used vehicle that met your specifications is a separate deal, you are paying him privately for a service he offers.

If you are being asked to pay the 16% IVA on the sale price twice, there is definitely something wrong there. But you will need to pay 16% IVA on the realtor's fee, as that is required on all goods and services in Mexico, unless money is changing hands under the table.

It has been 24 years since I last purchased a house in the US and nearly 10 years since I last sold one. But - if I am not mistaken both the buyer and the seller received a "settlement statement". In fact, I remember it being a single sheet of paper with two columns listing the expenses to be incurred on both sides. You are probably supposed to hold onto that stuff for your lifetime - but unfortunately I have not. Perhaps there are/were NO taxes mentioned on those statements at time of sale ? Perhaps the only mention was that the seller had to compensate the buyer for taxes already incurred ? But I believe the comssion was mentioned on those statements. I guess all along (well at least through these last two weeks(?) or so my house has been on the market) I kept asking my realtor (who's English is maybe a C-) can I get a "settlement statement" and she always responded - that is my job (meaning her job) . I guess that was just bad communication - I never got anything from her.

Edit : I'm going to share something that maybe I should not... but I have a friend in Mexico who, let's say, does not have to worry about money. Throughout the 10 years we have known her sometimes 'funny' things happen. Like we would get a quote for some expensive piece of work and we would mention the price to our friend (she having referred the worker) and then for some reason the price would be reduced. In this house selling experience - mine is now the 5th house this realtor has sold in the last 12 months or so within the circle of friends of my friend. It just feels like she (my friend) may have some how been doing something behind the scene. I know it sounds crazy. But - I expected it to take 2-3 years to sell this house. Not 2-3 weeks.

 

[Jreboll]

As I mentioned before, in a small town it’s a buyers market. Rich people have a lot of influence and can manipulate situations. You have to be discreet and plan your moves well. Narcos have further complicated these situations.