Puerto Vallarta Real Estate Articles

In Mexico, there is no requirement for persons acting as agents or brokers of real estate to be licensed or to have received education in the subject of real estate. There is no recovery fund for real estate agent or broker deals that go bad. Anyone can call himself a real estate agent or real estate broker.

The Spanish word "Corredor", which can be translated to mean, "broker," is a term that refers to commerce in general as in "Corredor Publico". The "Corredor Publico" in Mexico is licensed and registered to be engaged in general commerce or business of the sale of goods, and has nothing to do specifically with real estate. *

There is voluntary registration by some real estate agents with PROFECO in Mexico City. This office is Mexico's Department of Consumer Protection ("Proteccion al Consumidor"). PROFECO'S normal duties are to enforce Mexico's Consumer Protection Law. The majority of real estate agents in Mexico are not registered with this agency. * *This information is provided by Casa Nova Companies

There is a voluntary real estate agent/broker organization in Mexico know by the letters AMPI ("Asociacion Mexicana de Profesionales Inmobiliarios"). It strives to further education and requirements of its members to increase the level of professionalism. You can read about AMPI more on its website of the same name. In the Bay of Banderas, there are currently two AMPI chapters.

A buyer or seller of real estate in Mexico should ask their representative about the role that he/she will play in the real estate transaction.

A practitioner of real estate represents either the buyer solely or the seller solely or is a dual representative.

If you wish the person you have chosen to work with to represent you as the buyer, you can discuss and agree on the job description. The description can include your agent agreeing to be loyal to you by taking no action that is adverse or detrimental to your interest in a transaction. He/she can also agree to be timely in disclosing to you any conflicts of interest. He/she should advise you to seek expert advice on matters to the transaction that are outside his/her area of expertise. Other professionals called upon are often an attorney with knowledge and experience in real estate law, and/or an accountant with knowledge and experience in real estate accounting and tax law.

Your agent can agree not to disclose any confidential information from or about you except when required to by court order or if you give your specific permission.

Your representative should agree to use a good faith and continuous effort to find a property for you.

If you are the seller, you can agree with your representative as to his/her obligations to you. Your agent should be loyal to you as the seller, taking no action that is adverse or detrimental to your interest in a sale. He/she should timely disclose any conflicts of interest. He/she should advise you to seek expert advice on matters relating to the transaction that are beyond his/her level of expertise. Your agent should not disclose any confidential information about you except when required to by a legal action or when you give specific permission.

There are situations when the company or real estate practitioner is working with both the buyer and the seller at the same time. This is a case of being a dual agent. The dual agent in this case should take no action that is adverse or detrimental to either party's interest in the transaction. It is important to disclose timely any conflicts of interest to both parties. Both parties should be advised to seek outside advice relating to the transaction that is beyond the dual agent's expertise.

The dual agent should not disclose any confidential information about either party except when agreed to by the buyer and seller in advance. The dual real estate practitioner should continue good efforts to find a buyer for the seller and a property for the buyer.

The buyer or seller should have their interest put above the individual interest of the real estate practitioner. This is fundamental to the relationship between agents and their clients.

The seller can pay the real estate fee directly to the buyer's agent or through his listing agent. In some cases, the buyer pays his own agent. This decision can be made on a case per case basis.

The use of agency is not required in Mexico, but a principal to a real estate transaction will be well served to understand and require a level of performance from the person/company whom they choose to represent them.

The agreements of agency mentioned above are modeled after agreements practiced in the United States and Canada.

RESIDENTIAL MORTGAGES IN MEXICO

According to the December issue of Lloyd's "Mexican Economic Report", The National Tourist Promotion Fund (Fondo Nacional de Fomento al Turismo), Fonatur and Banamex-Citibank have set up a group to develop a mortgage product designed for retirees in the US and Canada who are interested in acquiring a home in Mexico.

The product will be tested in two or three pilot areas first. Studies of the retirement market have concluded that the greatest single obstacle to attracting more retirees to Mexico is the lack of suitable property mortgages. This group is also considering the possibility of offering reverse mortgages. In this arrangement, the owners finance a portion of the value of their property. When the real estate is sold or the owner dies, the mortgage is repaid out of the sales proceeds.

There are some US based mortgage lenders and Mexican banks currently working to provide mortgage products to nationals and foreigners. One of these lenders offers a construction/permanent loan to enable a resident of the United States to build a single-family residence in Mexico utilizing a full-time builder and permanent financing in one loan closing. If you wish further information, please contact me.