Top FAQs: Selling Your Home in San Miguel de Allende

Selling your home in San Miguel de Allende is an exciting process, but it also comes with important steps and considerations. To help make the experience as smooth as possible, we’ve compiled the most frequently asked questions from sellers just like you.

Understanding the Sales Process

1. When will I sign the actual contract for the sale of my home?

Once both parties sign the mutually agreed accepted offer, your representing agent will start working on the Buy-Sell Contract. Once both parties agree on the final terms of the contract—including any contingencies—it will be sent to you for review. After you and the buyer are satisfied with the terms, the contract will be signed either in person or via DocuSign.

2. What is the general process from contract to closing?

The key steps in selling your home include:

• Reviewing and signing the buy-sell contract until both parties are satisfied
• Opening an escrow account – we take care of that
• The buyer making a 10% deposit within 3-5 business days of signing the contract
• The buyer obtaining their SRE permit
• The seller working on any applicable tax exemptions
• The final deposit being made 3-5 business day before closing
• Closing on the scheduled date 

Escrow and Financial Considerations

3. What is an escrow account, and how does it work?

An escrow account is set up by an escrow agency in which both the seller and buyer (or their solicitors) are joint account holders. Escrow accounts are often used to hold money, securities, funds or any other kind of asset, providing protection for all parties.

4. How long does it take to set up an escrow account?

Typically, it takes 1-2 business days. If there’s a bank holiday, the process may be delayed.

5. Are there risks associated with using an escrow account?

We can never promise that there is zero risk involved; however, Escrow accounts do provide security for both buyers and sellers. We often work with TLA, licensed by the Texas Department of Banking, which comes with insurance, ensuring a smooth and reliable transaction.

6. Can I transfer escrow funds to a jointly held or sole bank account?

Yes, you can distribute the escrow funds to multiple accounts (up to 10 free transfers), including joint or sole accounts.

7. Can I transfer my escrow funds from one currency to another, and how does the exchange rate affect the final amount I receive?

Yes, you can change currencies but this can be risky. 

Firstly, it’s vital for both parties during the contract negotiation, to agree on which currency the buyer wants to purchase the house and in which currency the seller wants to receive their money.

When transferring funds from the escrow account to a bank account in a different currency, exchange rate fluctuations can lead to a reduction in the final amount received. For example, if the buyer deposits the purchase amount in Canadian dollars (CAD) into escrow, but the seller chooses to receive the funds in U.S. dollars (USD), the escrow company will apply its own exchange rate to the conversion.

Let’s say the buyer deposits CAD 1,000,000 into escrow, and the market exchange rate is 1 CAD = 0.75 USD. Ideally, this would translate to USD 750,000. However, if the escrow company applies an exchange rate of 1 CAD = 0.73 USD, the seller would receive only USD 730,000, resulting in a loss of USD 20,000 due to the currency conversion.

While the exchange rate offered by the escrow company is generally competitive, it is essential to be aware that it may not always match the exact market rate at the time of transfer.

*We are currently working with a company which helps eliminate the risk of losing during the currency conversion process. They make it possible to lock in the exchange rate and earn forward contracts. Please contact us if you’d like more details about this.  

8. When will I receive my funds from the escrow account?

Funds are typically received on the day of closing if processed before 12 PM; otherwise, they will arrive on the next business day. The funds can be received in a lump sum or divided among different accounts.

Legal and Documentation Requirements

9. What identification is needed to set up the escrow account?

• A valid passport
• Residency card or temporary visa number
• Driver’s license

10. What is a KYC form, and why is it necessary?

A Know Your Client (KYC) form is a standard requirement by escrow companies to verify the identity of all parties involved in the transaction. This form helps prevent fraud, money laundering, and other financial crimes. This needs to be printed off and signed by hand. It can then be scanned and sent back to your agent to pass onto the escrow company.

11. What other documentation do I need to provide for the sale?

You’ll need:

• Original Passport or INE (if Mexican)

• FM (Mexican residency) card

• Original Deeds and the CFDI invoice 

• Driver’s license

• Copies of recent CFE (electricity), water bills, Telmex, and other services

• Proof of paid property taxes (Predial)

• Capital gains calculation (IRS)

• Wedding Certificate if married

• RFC | CURP 

• POA (Power of Attorney, if needed) 

• No Lien Certificate (the notary will provide this)

• Termination of Employment and Settlement Agreement (or Finiquito) – a formal document that outlines the end of an employment relationship, specifying final payments, benefits, and any legal obligations between the employer and employee.

*If you need any further information on any of the above documents, how to obtain them, or if you even need them, please send us a message or give us a call. 

12. Do I need to meet with a notary or lawyer before closing?

No, we can take care of all of that and pass on the information to you directly. But if you have legal questions, we can arrange a meeting with our attorney, who will also assist with capital gains tax exemptions or any other doubts. 

Inspection Details

13. Will there be a home inspection?

The buyer has up to five days after signing the contract to conduct an inspection if desired. If they choose to do so, you do not need to be present—our team will accompany the inspector. Unless specified differently in the contract, the buyer will have 5 business days to conduct the inspection, receive the report, and decide if they want to go ahead with the purchase. The inspection is supposed to be based on checking any structural, mechanical, electrical, gas or plumbing damage not usual wear and tear of a property.

It’s important to understand that the inspection costs the buyer around $200-300 USD and is entirely their choice. The report will give the inspectors professional opinion about the condition of the property and any repairs he deems necessary. This is NOT a guarantee of the condition of property and further negotiation of any repairs that may come up in the inspection report are then up to the buyer and seller to negotiate.

Utilities and Property Services

14. When should I close my utility accounts?

Do not close any accounts unless you are sure that the buyers will not want to continue with them. At closing, the buyers will receive letters to transfer the utilities to their name. They cannot set up new accounts until they have the official deeds, which may take around two-three months after closing. 

 

15. Do I need to notify SAPASMA (water) or CFE (electricity) of the sale?

Not immediately. We will assist the buyers in transferring the accounts to their name to avoid service disruptions.

Final Thoughts

Selling your home in San Miguel de Allende is a well-structured process with clear steps and safeguards in place. From signing the contract to receiving your funds, we try to make it as simple as possible, so you can focus on your next move. 

If you have any more questions about houses for sale in San Miguel de Allende or need expert advice on San Miguel de Allende real estate, please send us a message or give us a call! Also, if you’re considering listing your San Miguel de Allende house, contact us today to find out about the incredible services and personal attention we can offer you!