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5 EXTRA EXPENSES YOU MUST CONSIDER WHEN BUYING A HOUSE

In addition to the property cost, you should account for notarial services, taxes, and maintenance.

If you hire a real estate agent, which is the best option, expect an additional 10% on the sale price.

Many Mexicans save to achieve the goal of owning their own home, something that, while not impossible, can take time and be challenging, as the average cost of a home is 1.6 million pesos, according to the Federal Mortgage Society (SHF). However, the process includes additional expenses that, without proper guidance, can cause problems or prevent you from successfully completing the purchase.

Beyond the fact that annual inflation may increase the initial price of your dream home, you need to consider other services that are necessary to finalize the deal, and which are outside the listing price. To help you prepare and get an idea of how much extra you should save, here are five additional expenses you may encounter along the way.

  • Real Estate Agent: Although some people buy properties without intermediaries, the most advisable option is to hire a real estate agent who can help manage the process legally and securely, as well as provide advice to ensure you’re making the best decision. Their fees are separate from the price of the property, typically ranging from 5% to 10% of the sale price, depending on the prior agreement made.
  • Property Appraisal: Appraisals are very important and a requirement when buying a property, especially if you plan to finance the purchase with a mortgage loan. This study determines the actual value of the home. Among the additional expenses, this one is relatively inexpensive, as in Mexico, an appraisal costs between 2,000 and 10,000 pesos, depending on the appraiser or company performing the evaluation.
  • Notarial and Deed Fees: When acquiring a home, a public notary is responsible for registering the property with the Public Registry of Property, as well as drafting the deed of sale. Since the notary is independent of the real estate agent and the original owner, their service fees are not included in the price of the property. Therefore, you should plan for around 2% of the property price for notarial fees and an additional 1% for the deed.
  • Acquisition Taxes: Like most goods in our country, real estate also comes with taxes to be paid at the time of purchase. While not all taxes may apply, it’s best to plan for them so you’re not caught off guard. The most important taxes are the Property Acquisition Tax (ISABI) and the Property Acquisition Tax (ISAI), which range from 2% to 6% of the total sale price.
  • Home Maintenance: Sometimes, when you buy a home, it may not be in the best condition, which could mean you get a better sale price. However, this is a false saving, as you will still need to cover repairs and renovations necessary to make the house livable. According to specialists and organizations like the National Commission for the Protection and Defense of Financial Services Users (CONDUSEF), you should set aside an annual budget of 1% to 4% of the property value for maintenance.

Regardless of whether you purchase the home using your own funds or a mortgage loan, these are the main extra expenses you must consider when starting the home-buying process. Some may vary depending on the state you are in or the agreement made with the seller, so it is highly recommended to consult with an advisor who can guide you in securing your property without setbacks.

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