As property prices continue to rise and more buyers explore flexible financing options in Los Cabos, seller financing is becoming an increasingly attractive route. One of the most secure and popular methods used in the region is the guaranteed trust.

To better understand this option, we spoke with Edgar Oriel from Cabo Closing Services, who explained how this financing model works—and why it's a smart choice for both sellers and buyers.

 First, What Is a Bank Trust (Fideicomiso)?

Foreigners cannot directly own land in Mexico’s restricted zone—areas within 100 km of the borders or 50 km from the coast (which includes Los Cabos). To purchase property legally, foreign buyers must use a Mexican bank trust (fideicomiso), where:

• A Mexican bank holds the legal title

• The buyer is named as the beneficiary, with full rights to use, rent, sell, remodel, or transfer the property

What Is a Guaranteed Trust?

The guaranteed trust is a variation of the bank trust specifically designed for seller financing. Here’s how it works:

• The seller remains the primary beneficiary of the trust until full payment is made

• The buyer becomes the secondary beneficiary and gains full rights once the financing is complete

• The property itself is held as collateral within the trust

Why Is It Safer Than Promissory Notes or Loan Agreements?

Unlike promissory notes or pledge agreements, the guaranteed trust offers significant legal advantages:

• Faster execution: If the buyer defaults, the seller does not need to sue or go through a court process

• The trustee bank executes the warranty, based on the terms outlined in the trust

• Everything is notarized and included in the official deed from the beginning

• The recovery of the property is streamlined, eliminating months or years of legal uncertainty

Benefits for Both Parties

For Sellers:

• Strong legal protection

• Clear steps in case of buyer default

• No need for litigation to recover the property

For Buyers:

• Opportunity to acquire property without immediate full cash payment

• Transparency and clear terms set from the start

• Easier negotiation directly with the seller

Is This Method Becoming More Common?

Yes. According to Cabo Closing Services, more and more transactions in Los Cabos are using this method, particularly for mid-to-high-end properties where flexibility and security are both priorities.

Get Expert Support

If you’re considering buying or selling a property using seller financing in Los Cabos, it’s essential to work with experienced professionals who can structure the transaction properly and protect your interests.

Cabo Closing Services is based in Altaterra Corporativo in Cabo San Lucas, and you can visit them online at caboclosingservices.com.

If you're a seller looking for safer financing options or a buyer hoping to make your dream home in Cabo more accessible, a guaranteed trust could be the ideal solution.

Want to learn more? Reach out to your Coldwell Banker Riveras agent today or leave a comment below. We’re here to help guide you through every step.