Sunrise on Zihuatanejo Bay. Photo by Paul Curry.
Those of us working in the Mexican real estate industry are frequently asked the same question. “Is it safe to buy real estate in Mexico?” The answer is “Yes, if you follow certain guidelines.” In which case, your purchase is as safe as it would be in Canada, the United States, or elsewhere.
Only a hand-full of states have real estate licensing. In order to make a purchase, one needs to make sure to deal with a member of The Mexican Real Estate Association. (AMPI) This group has sections in many localities across Mexico. It has a Code of Ethics patterned after that of the United States’ National Association of Realtors® (NAR). In fact as a result of a joint venture with NAR signed in 2006, AMPI members can legally use the word REALTOR® and the NAR logo.
No one knows how many people are selling real estate in Mexico. We call those who are not members of the professional real estate association, “coyotes.” They could be taxi drivers, bar tenders, surfers, etc. but cannot legally be called a REALTOR®
Trato directo
The English translation would be, go direct to the seller. Earlier this year, Jose Oscar Vegas, a representative of Mexico’s Secretary of Government, made a speech to members of the real estate industry. He addressed two items:
a) The need for real estate licensing in Mexico, (AMPI Sections in Baja California and other parts of Mexico are working on a law governing the industry with hopes to require licensing and certification in all states soon)
b) The amount of corruption that exists in the sector and Trato Directo. He referred to the latter as muy peligrosa (very dangerous).
There are tremendous pitfalls that can happen when a private citizen attempts to sell a property. These are usually in regards to sellers not having sufficient knowledge of the laws governing real estate transactions, leading to extra time and expense in the transaction. This can range from minor delays and annoyances, like the seller not having the necessary documents or knowing what documents are necessary, to major obstacles such as not knowing the laws about paying social security to workers.
Perhaps an addition was put on a home or a swimming pool installed. Through ignorance, the owner did know about the laws concerning the payment of social security. Years later, it results in a big payment and fines, before title can legally transfer.
Other possible problems with trato directo and private individuals are too many to list here, your best defense is to deal with professionals and be educated.
Finally, I would like to shatter a common myth. That is the need to engage an attorney in Mexico to complete a transaction. This is not true. A closing agent can do the work. Some think the Notario must supervise the work. Again not true. They will not perform the necessary work and as a matter of fact it is illegal for a Notario to escrow funds.
NOTE: for a list of rules for safely purchasing in Mexico, please e-mail: info@settlement-co.com
