La Paz, Baja California Sur, is a very special place.    First, it is important to understand that the words, La Paz mean City of Peace.   And it is!   Residents live full and happy lives and are not interested in conflict or unhappiness.   We help one another!   Over the next few weeks I will share some of the places and activities that make my La Paz real estate region so special for quality living.

Let’s start with RANCHO EL CAMINO

Peter and Cher Gatto, from the United States have an oasis on 40 acres of Mexico real estate located against the rugged coast mountains that  hug the Sea of Cortez just south of La Paz.    When they arrived at the ranch some years ago it had a dilapidated dwelling, beautiful springs, lots of rattlesnakes and scorpions and not much else.  This has become a training camp and learning place for hundreds of children from La Paz who have not had this type of opportunity in the past.  It also attracts  young people from all over the United States who spend their summers at Rancho El Camino helping building, working with children, tending the animals.

This summer, 2011, 100 students will come from the US as interns, learning to work and play together, sharing their experiences which range from KP duty, to building dormitories, caring for the animals (goats, cows, horses, a rabbit, chickens, etc) and having a healthy spiritual experience.

Peter and Cher consider this a ministry and are thankful to have the opportunity to share beauty, nature and goodness with others.

They are especially proud of the horse ministry in which young ones learn to love and care for horses.   This is good for the horses but seems to be even better for the children, many of whom have never been close to a large animal before.

They have also established a camping ministry which makes the ranch available for weekend camping to young people from churches of all denominations and sizes from La Paz and the surrounding communities.

Located on a dirt road at the edge of the mountains after passing through the Marquez de Leon neighborhood of La Paz, Rancho El Camino is a paradise in the desert.

Author Linda Neil has over 35 years of hands on experience in all aspects of Mexican real estate. She holds membership in AMPI, NAR, and FIABCI and PROFECO Certificate 00063/96.  Founding  member of AMPI Los Cabos and two time member of the national advisory board she is the owner broker of LINDA NEIL PROPERTIES for more information (512)-879-6546 THE www.TOPmexicorealestate.com NETWORK

“Mexico’s Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely!”

At the beginning of the decade, neither the U.S. Department of State nor U.S. cable TV stations had started their relentless campaigns to inhibit U.S. citizens from coming to the Mexico real estate regions, doing tremendous damage to both the tourism and real estate industries. More on that below.

When the person listed by Forbes magazines as the wealthiest in the world, you would expect when he undertakes a new enterprise it would be big and of the highest quality. This is the case with Carlos Slim, his new world class museum and commercial/residential development.

• 8.2 million – the number of international tourists in Mexico for 2010 -  (from Jan. to Oct., arriving by air)
• 17.8 % – The increase compared to the same months during 2009
• 13.4% – The increase in American travelers during that period over 2009
• 6.4% – The increase compared to 2008, which was the best year for tourism in Mexico in history

The first quarter of 2011 has seen a mini recovery for the real estate market.This I am told includes the $1 million USD plus market at the Palmilla project. Following is an excerpt from the recent newsetter issued by my friend Martin Posch of Nieman and Posch in Cabo San Lucas:

Author John Glaab CIPS is a founding member of AMPI Los Cabos. A Certified International Property Specialist he is active in the National Association of Realtors® Global Business Alliances Group. John was recently appointed as a member of Ampi’s International Relations Committee. for more information (512)-879-6546 THE www.TOPmexicorealestate.com NETWORK

“Mexico’s Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely!”

There is more Mexico land for sale on golf communities as La Paz Adds its Second Golf Course:   The city waited 475 years for its first golf course to open at Paraiso del Mar, in 2009. In November of 2010 the Costa Baja golf course and club house were inaugurated. Participating in the opening were golf legend Gary Player and perennial number one ranked female golfer, Lorena Ochoa. Following the ribbon cutting ceremony Gary and Lorena conducted a driving range and bunker clinic. Later the two teed off for six holes in front of a large crowd.

This is Player’s first golf course in Latin America The winner of 163 tournaments, he has designed 300 courses spread over five continents.

” This one is really special, he said, nowhere else can you see the desert and the sea meet like this.”

The last tournament played by Ochoa was last May at Tres Marias in Morelia, Michoacan. She manages a successful golf school and sponsors a high school in her native Guadalajara. The Lorena Ochoa Invitational is held annually at the Guadalajara Country Club.

Costa Baja Resort and Marina is a Mexico real estate development that includes the 550 acre development situated on the Sea of Cortez, just north of La Paz, Baja California Sur. In other news from the resort, the former Hotel Fiesta Inn has been renovated, upgraded and opened as a Heritage Hotel.

Author John Glaab CIPS is a founding member of AMPI Los Cabos. A Certified International Property Specialist he is active in the National Association of Realtors® Global Business Alliances Group. John was recently appointed as a member of Amp’s International Relations Committee. for more information (512)-879-6546 THE www.TOPmexicorealestate.com NETWORK

“Mexico’s Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely!”

The La Paz  Hotel and Tourism Association (Emprhotur) met recently to review and approve its marketing and promotional budget for 2011.  The La Paz real estate market benefits from such programs as the regional attractions are promoted to tourists and second home buyers.   The budget had been approved by the Association’s technical committee in December. At the General Assembly presided over by Pedro Aguilar from Hotel Cantamar, the budget and marketing plan was approved in detail.

Funds generated by the 3% hospitality tax, plus money coming from a coalition of businesses are in a fideicomiso. (Trust Fund) and are used to promote La Paz as a tourist destination.

The trust fund for 2011 totals $ 1,638,814. Of this amount, $ 207,725 will be used for direct promotion in the Mexican market and $ 136,266 in the international market. EMPRHOTUR will participate jointly with the State Secretary of tourism in tourism fairs and conferences, both in Mexico and abroad.

In addition to this advertising and promotional literature an ongoing campaign will be aimed at social networks and the maintenance of the web site VIVALAPAZ.net.

Last year the Secretary of tourism was in La Paz to discuss the construction of a convention center. Technical experts have concluded such a project is viable. Funds have been designated to be used for the planning of a new center.  The promotion of Mexico as a world wide tourist destination helps not only the tourism industry but a wide variety of related sectors such as the Mexico real estate industries.

Author John Glaab CIPS is a founding member of AMPI Los Cabos. A Certified International Property Specialist he is active in the National Association of Realtors® Global Business Alliances Group. John was recently appointed as a member of Amp’s International Relations Committee. for more information (512)-879-6546 THE www.TOPmexicorealestate.com NETWORK

“Mexico’s Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely!”

Mexico Resort Real Estate Update ………….

From The Settlement Company®

Welcome to our 4th Quarter newsletter. It is the final edition for this decade.  TOP Mexico Real Estate will divide this newsletter into several posts which will be aired over the next several days.  The decade started out with a strong world-wide economy and few if any signs as to how it would close. It has been a rather rocky road.  The words, “bail out” are heard almost daily. The latest of course is the bail out of the Irish banks by the European Community.  Economists are sending mixed signals. The stock issuance by General Motors was a bright spot, but followed too quickly by events on the Korean peninsula which set back the market. A new book, “All the Devils are Here; the Hidden History of the Financial Crisis, is co-authored by Barbara McLean. While it does not place blame, it is a rather accurate chronicle of what has caused the crisis. “Black Friday” was hopefully a good omen for retailers in the U.S. Shoppers came to buy in droves. Macy’s Inc C.E.O. said the retailer had 7,000 shoppers outside its flagship Herald Square store in Manhattan at 4.am. on Black Friday. That is 2,000 more than last year.

La Paz Real Estate region Makes Record Book: Those who habitually walk and exercise on the Malecon had a surprise on day, last month. Lining the route were tables with a white paper covering. We left the house early for our normal trip to the gym, but the road was closed.  So we walked to the start of the Malecon. On the way we saw a large unit making dough. We continued to the end where we met Ralph Hannah who had been sent from Uruaguay by the Guinness Book of Records group. He had been sent to La Paz to act as Adjudicator. Employees from 54 restaurants, along with 3000 volunteers were busy creating the world’s largest burrito. A pickup truck had been modified so that a conveyor coming out of the back would spew out a seamless tortilla. As the truck moved ever so slowly down the Malecon, and workers lifted the tortilla on to the line of tables.

The tortilla would be filled to create the burrito. Ingredients used were, two tons of flour,250 liters of milk, 400 kilos of tomatoes, 40 large onions. 300 chiles 200 kilos of salt 3 tons of minced fish.  When finished, the burrito weighed 5.7 tons. I walked down to the Malecon a couple of times to watch the work in progress. On one trip, I was treated to a famous La Paz real estate sunset.

After 15 hours of work (and two years of planning) Adjudicator Hannah proclaimed the record was official. The burrito was then cut into 27,000 pieces to be shared by the spectators. Mr. Hannah mentioned there were several Mexican groups seeking a record this year. These included Guadalajara (largest Mariachi Group) and Mexico City a large enchilada which he told me was smaller than the burrito. Mr.  Hannah accredited the activity to Mexico’s celebration of Independence and the end of the revolution.

John Glaab

“Mexico’s Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely!”

Thomas Lloyd graduated from Purdue University Krannert School of Management with a degree in Management/Financial Option Investments. He has been living, investing, and working professionally in Mexico for over 15 years. In the summer of 2009, he received the first federally applied Mexico Real Estate Degree and Mexico Professional Real Estate License S.E.P. #5978657. He is the current president of TOPmexicorealestate, you can contact him at (512) 879-6546 or through the company’s web site www.TOPmexicorealestate.com NETWORK

“Mexico’s Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely!”

 

ERLINDA WEYER
who passed from this life
on December 7th, 2009

Author John Glaab and Linda Neil have over 35 years of hands on experience in all aspects of Mexican real estate. Linda holds membership in AMPI, NAR, and FIABCI and PROFECO Certificate 00063/96. Current member of the national advisory board of AMPI she is the owner broker of LINDA NEIL PROPERTIES for more information (512)-879-6546 THE www.TOPmexicorealestate.com NETWORK

“Mexico’s Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely!”

Is the Mexico Retirement industry a niche market that can help the Mexico real estate market come back?

 With millions of baby boomers reaching retirement age every day, the market for a lovely place to live with the security and services required is growing exponentially.  

Many baby boomers no longer want the five bedroom home and quarter to half acre home in the suburbs.   Nor does the luxurious and prestigious home on the beach seem as attractive as it once was.  Too much work!   Too much upkeep! And too much money!  Today’s couple reaching retirement age is looking for an interesting and inviting place to live that promises outstanding value and something different!

All this and more was covered recently in a conference in Mexico City.   The Mexican Association for Assistance to Retirees.   Over 400 industry leaders, developers and those looking for some answers met at this conference in Mexico City to discuss parameters and new strategies for the Mexico retirement industry.

Many are coming to recognize that Mexico retirement options are very feasible with its lower cost of living, culture and tradition for caring, with outstanding medical services, may be the new place for Americans and Canadians looking for retirement.   Perhaps Mexico homes and this country will no longer be viewed just as a vacation in an exotic place!

When the crisis really hit the U.S., many buyers of Mexico property left the market.   Their investment funds came from the stock market, 401 Ks and home equity.   These sources obviously dried up and the resort and vacation market hit bottom.    Prices in the Mexico real estate market, however, have not necessarily come down in the resort areas since many sellers do not have bank loans on their properties and are in a position to hold on to their properties until that market returns.

These properties may not sell soon, however.   There seems to be a feeling among those who suffered reverses in their portfolios that this time they will look for quality, value and security rather than plunk down money on an emotional and perhaps exotic purchase.

There is a delayed demand – many of those who left the property market in 2007 and 2008 did so because they were suffering devastating losses in U.S. investments.  Now that those markets are beginning to recuperate, it seems that the home or condominium for vacations, rentals, active retirement will be more attractive if of high quality, easily accessible and not exceed 200,000. to 300,000. USD in price. Also very desirable is the development that integrates the Mexican culture into its overall concept such as those found in the La Paz Real Estate area. The home away from home of yesteryear, insulated from the Mexican culture, may not be quite as attractive as it used to be.

What may be sought after in this new Mexico retirement market is the development that offers Active Living and Aging in Place.   In other words, independent living modules, either separate homes or condominiums within a secure community with many activities available either on site or in the community: such as biking, hiking, fitness, swimming, crafts classes, music activities.  These activities are geared to the mature active adult who has always wanted time to do these things and can live independently.   Within the same community, however, are medical facilities, and increased services available such as the preparation of meals, home visits and so forth.   Different packages of services are available to fit the variouef levels and requirements and can be purchased from a hospitality company operating the development.  

These independent living units can either be purchased or leased.   The move to assisted living will focus on  a more institutional environment which features everything from meal preparation to intensive care. 

Under consideration at present in the U.S. government, is an initiative to permit Medicare benefits to extend to care received in Mexico.   Since health care costs are substantially less in Mexico for the same level of care, both the U.S. government and the patients will benefit.

In all cases, the successful Active Living to Assisted Care development will require excellent access to health facilities, airports for quick access by loved ones, and outstanding communications systems in the community.   There are perhaps a dozen cities in interior Mexico which may fit the bill for this new focus on sales to the foreign market.

 
Author Linda Neil has over 35 years of hands on experience in all aspects of Mexican real estate. She holds membership in AMPI, NAR, and FIABCI and PROFECO Certificate 00063/96. Current member of the national advisory board of AMPI she is the owner broker of LINDA NEIL PROPERTIES for more information (512)-879-6546 THE www.TOPmexicorealestate.com NETWORK

“Mexico’s Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely!”

Mexico Real Estate offers many great opportunities.  However, because of the fact that laws and processes are different here in Mexico, many non-Mexican buyers make costly errors because they don’t take the time find the information they need first.  In some cases when buying Mexico homes, the new buyers even make blunders that they would avoid back home – simply because of the uncertainty of being in a different business culture.  Based on their years of direct experience in the Mexico property market, a panel of experts from the TOPMexicoRealEstate NETWORK, “certified professionals that specialize in guiding new buyers through the Mexican purchasing process,” has identified the top 5 mistakes made by non-Mexican buyers.  The following is a compilation of their answers, giving a general overview of their answers for each of the five points, then giving their exact answers below.  Each mistake is followed by advice from the panel on how to avoid causing problems for yourself in that area.

The real estate experts who contributed to this article are:

Jim Scherrer – Puerto Vallarta Real Estate

Linda Neil – La Paz Real Estate

Mitch Keenan – Yucatan Real Estate

Thomas Lloyd – Playa del Carmen Real Estate

The top 5 errors non-Mexican buyers make are:

#1 Not surrounding yourself with reliable, experienced professionals

The panel’s answers point to this as the number one error that non-Mexican buyers make when buying Mexico Real Estate.  The key behind this is to find an experienced, reliable broker or agent.  After this, it is also necessary to find a notary public – again with knowledge and experience to do things right – and a Mexico title insurance company, among others. A reliable agent is central, as they can also help point you to other trustworthy professionals.

The panel’s answers are:

“Not using a reputable Agent/Broker, not using a reputable notary public, and using a Title Company.” – Mitch Keenan – Yucatan Real Estate

How can you avoid this error?

“Check with the USA Consul in Mexico. They have a list of recommended Notary Publics and Agents.” – Mitch Keenan – Yucatan Real Estate

“When you select an agent, make sure that the agent is member of AMPI, The Mexican Association of Real Estate Professionals.  Also, check references.  This agent is representing your purchase in a country where you are not familiar with the laws; you need to be confident that that person is.” -  Linda Neil – La Paz Real Estate

“These top 5 errors are only a few examples of the items and risks that a non-Mexican buyer must administer. There are hundreds of other topics that a buyer must address and decide upon; only through EXPERIENCE can teach us to look for these issues. The best way to avoid all of these mistakes and other errors in the purchasing process is to surround yourself with experienced players. It costs the same commission rate to hire an agent with 15 years experience vs. an agent with only 2 months experience.  If you are making a $200,000 dollar investment wouldn’t it make sense to hire someone with credentials and years of experience to represent you.” – Thomas Lloyd – Playa del Carmen Real Estate

#2 Buying from the listing agent and not finding an exclusive buyer’s agent

Even if an agent seems honest, reliable or experienced, no agent who is representing the seller can also represent they buyer fairly, since each one needs an agent protecting only their interest.

The panel’s answers are:

“The most common mistake I have seen are for new buyers to retain the services of a real estate representative just because he was advertising a property on the internet and had his email and phone number on a yard sign next to a property. I am surprised as how some non-Mexican buyers who are very diligent in their money investment decisions while in their home countries come to Mexico and will choose to retain the services of a real estate agent based on the fact that the agent is able to speak English.” – Thomas Lloyd – Playa del Carmen Real Estate

“Buying anything from a listing agent or the sales agent representing the developer; their loyalty is to the seller and they have a fiduciary duty to that seller. No matter how honest, nice, and sweet that agent may seem, it would be a conflict of interest for him to discuss any negatives about the property or to truly help the buyer in getting the best price and contract protection.” – Jim Scherrer – Puerto Vallarta Real Estate

How can you avoid this error?

“Use a professional buyer’s agent exclusively representing buyers and having no listings.” – Jim Scherrer – Puerto Vallarta Real Estate

“The agent who represents you as a buyer cannot represent the seller as well.  Agreeing to and signing an agency disclosure agreement can serve as further protection.” – Linda Neil – La Paz Real Estate

#3 Not carefully considering the implications of different property types, locations, etc.

Different property types have different have various considerations to be made.  Especially the area of pre-construction purchase of Mexico Condos needs special attention; preconstruction offers excellent opportunities, but for the buyer’s protection, the right steps need to be followed.

The panels answers are:

“Buying a pre-construction Mexico Condo with a payment schedule based on the calendar.” – Jim Scherrer – Puerto Vallarta Real Estate

“Buying in a remote (and supposedly growing) area in order to save money. As everyone knows, the three main rules to buying real estate anywhere are location, location, and location. During periods of recession and/or slow growth, these remote areas are the first to drop in value and the last to recover. With current economic conditions the way they are, it may be many years before the remote areas see any appreciation in value.” – Jim Scherrer – Puerto Vallarta Real Estate

“You should not attempt to buy Ejidal property. Ejidal property offers considerably lower prices, but it must be converted to private property before it can be sold.” – Linda Neil – La Paz Real Estate

“When purchasing in preconstruction, to allow for some money to be held back until the legal possession has been delivered. Many times the buyer will have paid out the entire value of the property, have received the physical possession, yet remain waiting for the developer to deliver the legal possession.” – Thomas Lloyd – Playa del Carmen Real Estate

How can you avoid these errors?

“The buyer needs an agent that knows how to write purchase contracts that protect the buyer’s initial deposit and progress payments. They should be prepared with payment schedules based on construction milestones, delivery dates, closing date, etc. as opposed to calendar dates. They should also have construction delay penalty charges, contingencies for 100% refunding upon failure to perform, and escrow protection.” – Jim Scherrer – Puerto Vallarta Real Estate

“Include only private property in your property search.” – Linda Neil – La Paz Real Estate

#4 Not reviewing contracts and documentation or following processes properly

Reviewing all documentation and following processes properly is necessary in any real estate purchase.  However, this is especially true when buying Mexico Real Estate, where regulations are not as well defined to protect the buyer, and taxation and other processes follow different rules than what buyers are used to in their home country.

The panel’s answers are:

“Many first time buyers do not understand the implications of the Capital Gains Tax issues. They believe that capturing a low acquisition cost on a property will decrease their closing costs expenses but forget to understand the more expensive capital gains tax levied against profits on the sale of the property.” – Thomas Lloyd – Playa del Carmen Real Estate

“A potential risk is not to check if you are dealing with the legal owner of the property.” – Linda Neil – La Paz Real Estate

“Assuming everyone they deal with has the same business ethics as they are accustomed to in the US or Canada, thereby not paying extremely close attention to ALL documentation they are signing.” – Jim Scherrer – Puerto Vallarta Real Estate

“Not including a clause in their purchase sales agreement to allow for the first beneficiary (the buyer) to have the voting rights transferred from the fiduciary for condo association meetings.” – Thomas Lloyd – Playa del Carmen Real Estate

“Some non-Mexicans believe they can hold property with a private contract and avoid paying closing costs and taxes. They are placing much of their hard earned money at risk by not receiving a title duly subscribed with a notary public and filed in the public registry.” – Thomas Lloyd – Playa del Carmen Real Estate

“Depositing money in an agent’s or seller’s personal account.” – Mitch Keenan – Yucatan Real Estate

How can you avoid these errors?

As Thomas Lloyd points out above, “these top 5 errors are only a handful of examples of items and risks that a non-Mexican buyer must administer.”  It is almost impossible for an new buyer to manage, and often even be aware of, all of these considerations.  Therefore, it is of key importance to have a reliable agent whose experience gives them the necessary knowledge of the various contracts, processes and documents involved.  Additionally, the panel points out the following:

“Never deposit money or give money to an agent or a seller without verifying that the agent has a verified earnest money account or escrow account.  It is always a good idea to spend the extra $500 bucks to set up an escrow account with a title company to hold the deposit.”  – Mitch Keenan – Yucatan Real Estate

“Deal only with the legal owner of the property or a legal power of attorney.  It is necessary to request, receive and review a copy of the title.  For cases such as this, your agent will have to know Spanish, or you will need to get a certified translation.  You should also have a title investigation, and buy title insurance.  Even if the prices are high, it is worth avoiding risks involving the title.”  – Linda Neil – La Paz Real Estate

#5 Rushing a Decision

Your Mexico real estate purchase is one of the most important decisions you will make, whether it is property for your home, or for an investment.  Rushing into a decision can have undesired, long term consequences.

The panel’s answers are:

“Being pressured into a hurry up decision.” – Mitch Keenan – Yucatan Real Estate

“Spontaneously buying on the beach, having no idea of the many magnificent properties available with better views, neighbors, lifestyle, etc.  than can be found on the beach.” – Jim Scherrer – Puerto Vallarta Real Estate

How can you avoid this error?

“Never be pressured into a deal. Take your time do your due diligence.” Mitch Keenan – Yucatan Real Estate

If you feel you are being pressured, or not being presented with all the best options, also see the advice for error #1 “Not surrounding yourself with reliable, experienced professionals,” and error #2 “Buying from the listing agent, not finding an exclusive buyer’s agent.”

For further information about buying Mexico Real Estate and avoiding costly errors, contact a Mexico Agent in the TOPMexicoRealEstate NETWORK; OUR EXPERIENCE; thousands of Property transactions & years of assignments in Mexico AT WORK,  PROTECTING YOUR INTERESTS.

You find a very interesting Mexico Home on the internet, and the price looks right.  Or maybe you’re down in Mexico for your vacation on the beach and you see a great looking Mexico Condo, in a perfect location with a for sale sign on it.  What’s the first thing you should do?  Call the phone number on the sign, or on the web page advertising the property?  You get the best deal that way, since you’re going straight to the seller, without involving more people in the transaction, right?  WRONG!    False logic, it seems simple that contacting the listing agent would appear to be the first best step to excercise; this misconception can lead to inadequate representation of you the buyer or a conflict of interest between buyer and seller in the Mexico real estate transaction.    

Linda Neil, La Paz Real Estate expert, and Jim Scherrer, Puerto Vallarta Real Estate expert, of the TOPMexicoRealEstate NETWORK, explain quite clearly why you should choose a Mexico real estate agent who represents only your interests as a buyer, and how to avoid such risks when buying property in Mexico.

One of the biggest misconceptions about the real estate world is that by contacting the listing agent, we save something; we think we save money – either by finding a better price, or by saving commissions; we think we save time, avoiding more steps in communication or extra contracts.  We will see that these perceptions are entirely false!  In fact, if you have the listing agent represent you the buyer in the purchasing process, you could end up paying more, and allow yourself to be placed in great disadvantages within the contracts and in other aspects of the sale.

First of all, let’s consider the point of saving money.  As for the purchase price, first we need to consider who the listing agent is working for.  The listing agent has been contracted by a person or company selling a piece of real estate.  The agent has signed a contract and has a fiduciary obligation to the seller – a completely normal arrangement.  That agent is obligated to protect the interests of the seller.  What are the interests of the seller?  Getting the HIGHEST PRICE reasonably possible, and including as many benefits in the seller’s favour as possible.  What are your interests as a buyer? Getting the LOWEST PRICE reasonably possible, and obtaining the most benefits in your favour.  These two sets of interests cannot coincide on all points – especially not in the area of PRICE.

“How is one agent, negotiating between buyer and seller, going to be able to obtain all of this for buyer and seller?” observes Linda Neil.  “Smells like conflict of interest to me!”

An honest seller’s agent committed to protecting the needs of his clients would refer you, the buyer, to another professional agent who could represent your needs fairly.  The trouble occurs if the listing agent is not upfront about his or her obligations, and attempts to represent both you and the seller.  You, as a buyer, must avoid this situation.

Now, having established that it is a conflict of interest for a seller’s agent to represent you, the buyer, specifically in the area of cost, do you really think that the listing agent will be able to get you a lower price than another agent?  Since his first and main obligation is to the seller, who is looking for the highest price, the opposite is probably true; you will end up paying a higher price.

Perhaps you are wondering about commissions.  Usually the commission is paid by the seller; the seller’s agent and the buyer’s agent generally split the seller’s commission 50-50.  There is usually no cost to the buyer to have another agent represent his needs, nor is there any extra cost the seller.

“Find a good buyer’s agent and have him contact the advertising agent,” says Jim Scherrer.  “It’ll cost the buyer nothing and will probably save him a fortune and many head and heart aches!”

The fact that the seller’s agent is looking out for the seller’s interest first could also have the result that you do not find out about problems either with the physical property or the paperwork.  In Mexico regulations are not as well defined, and as a result there is less obligation for agents to disclose problems with the property to the buyer.  If you do not have an agent representing only your interests, it is more likely that problems will go unnoticed or that you will not be made aware of them.

The same idea applies to paperwork.  The same amount of documentation is necessary whether there is one or two agents involved; again, having a buyer’s agent will ensure that there is someone looking out for and protecting your interests in the processes, and may in fact save you a bureaucratic mess later on, when issues surface later on that really were not in your best interest.  A buyer’s agent will watch out for your needs and make sure you are aware of what is going on.  Communication will also be clearer, since it is better defined who is representing who.

Another important point is that a committed buyer’s agent will give you a complete overview of properties available and suitable for your needs and price range, not favouring, or pressuring you to buy from a certain developer or seller.

“A true buyer’s agent,” points Jim Scherrer, “will show the buyer ALL the properties that meet his needs and budget; not just those they have as in-house listings.”

This means that you can explore and evaluate all the options.  If you do not have all the options presented to you, it is not possible to know that you are choosing the property best for your needs.

A buyer’s agent will also help save the buyer time.  Linda Neil lists the following items; the buyer’s agent can help evaluate the buyer’s price range and different financing options, review the condition of the property, advise the buyer concerning key inspections, suggest where they can find the experts to carry out the inspections, check costs of owning the property, such as property taxes and utilities, prepare and present the official offer, make sure the contract is as favourable to the buyer as possible, and review documentation transfer.  These steps can be time consuming, and many of them require experience to make sure that your interests are represented.  A seller’s agent may have the experience to know whose interests they represent, but may be limited by his obligations to the seller.

“A true buyer’s agent will negotiate the very best price possible” summarizes Jim Scherrer, “and will clearly discuss all the pros AND cons of the purchase while protecting the buyer’s best interests.”

Beatriz Lozano, “TOP Mexico Real Estate NETWORK; Mexico’s leading specialists for finding and purchasing Mexican properties safely !” (512) 879-6546 or the company’s web site www.TOPmexicorealestate.com

Buying Mexico Real Estate can be an exciting experience, and one of the most important decisions you will make.  For this reason it is very important to know the ins and outs of buying real estate in Mexico, being familiar with the laws and the processes.  A key factor to consider is that in Mexico, the law does not offer the same regulations to protect buyers as in other countries. This having been said, buying Mexico Real Estate can be done safely, if the right steps are followed.

“Buying property in ANY country can be stressful,” observes Linda Neil, real estate expert from La Paz, Baja California, “A property investment in Mexico can be just as safe and secure as in the U.S. or Canada, if it is done correctly!”

A panel of experts from the TOPMexicoRealEstate NETWORK, “Your Expert    Property-Finders,” agrees that the most important step in avoiding the risks is selecting the right agent – an agent with experience and knowledge.

“The most important key player is an agent or broker with many years of experience,” says Thomas Lloyd, founder and president of TOPMexicoRealEstate.  “You are not looking for someone who knows where the best restaurants or bars are located, you want someone who has been on the ropes, someone who has witnessed problems or obstacles in previous transactions so he knows what to look out for.”

In the following interview, some members of TOPMexicoRealEstate’s panel of experts discuss the main risks involved, which they have seen during years of experience, and give advice on how to select an agent who can help you avoid these risks.

What kind of risks can buying real estate in Mexico involve? 

Here the brokers highlight several points in the purchasing process which buyers should watch, including property types which can pose higher risks if proper research is not done.  These risks are tied to, and made more significant, by the fact that regulations in the Mexico Real Estate industry are not as well defined as in other countries.

Mitch Keenan – Merida Real Estate

The largest risk is to NOT use reputable professionals. Interview several real estate agents and notary publics. Ask for references and check them. Raw land or raw beach is a more risky purchase than a home that has other homes on all sides of it. To mitigate that risk, use a title company. Additionally, when a fideicomiso is  issued by the bank to hold title, it does provide another layer of protection to the Buyer.

Jim Scherrer – Puerto Vallarta Real Estate

The risks are minimal when the economy is booming. During those times, the main risk is just paying too much. However, during periods of recession the risks are numerous. The greatest risk would probably be in buying pre-construction developments with no assurance of completion.

Linda Neil – La Paz Real Estate

Mexico Real Estate agents are not obligated by the same regulations in Mexico.  They do not have the responsibility to disclose all problems or defects to buyers or sellers.  The fact that the government does not regulate real estate to the same extent as in other countries poses higher risk to buyers.

Thomas Lloyd – Playa del Carmen Real Estate

The regulations in Mexico are not as sophisticated in protecting the real estate buyer as compared to our home countries.  For example, there are no disclosure laws regulating what information needs to be revealed to a buyer of real estate.

What does a buyer need in terms of information in order to avoid/reduce these risks?

Each of the brokers mention some specific steps to be taken to avoid specific risks.  However, as Lloyd mentions, “There are so many areas and risks that need managing it would be impossible for a new buyer to understand or remember to address each of these items.”  The key factor here is finding an experienced, knowledgeable professional who is very familiar with the details of these issues, and can guide the buyer through the process.

Jim Scherrer – Puerto Vallarta Real Estate

The buyer needs an agent that knows how to write purchase contracts that protect the buyer’s initial deposit and progress payments. They should be prepared with payment schedules based on construction milestones, delivery dates, closing date with “escritura”, etc. as opposed to calender dates. They should also have construction delay penalty charges, contingencies for 100% refunding upon failure to perform, and escrow protection.

Linda Neil – La Paz Real Estate

To avoid the risks involved in the lack of regulations is finding a buyer’s agent who adheres to principals and ethics.  One way to do this is to work with a agent who is a member of AMPI, the Mexican Real Estate Association; AMPI is connected with NAR (USA) and CREA (Canada), and its members follow a Code of Ethics.

Thomas Lloyd – Playa del Carmen Real Estate

Basically, I believe that it is very important that the buyer retains the services of an experienced broker. There are so many areas and risks that need managing it would be impossible for a new buyer to understand or remember to address each of these items. But, if you associate yourself with a person who is dedicated to such activities, a person who has years of experience and has witnessed and participated in hundreds of Mexico real estate transactions, such a person is an invaluable person to have on your team, taking care of your interests and monies.

What should the buyer look for in terms of an agent?

Having established that a good agent is the best way to avoid the risks involved in buying Mexico Real Estate, the brokers point out some elements to look for.  Some of the common points are experience, honesty, loyalty, thorough knowledge of the market, knowledge of Spanish, and experience in Mexico.  Most of these factors may not be measurable in a concrete way.  Keenan, Scherrer, Lloyd and Neil point to some indicators of these traits, which include certifications, licenses, degrees – Mexico now offers a real estate degree with a professional identification number, and, of course, references and testimonials (for these to be used well, there should be several, and they should actually be checked!) .

Mitch Keenan – Merida Real Estate

References. Lots of them. Check them.  Also years in the business. Reputation in the community. A license or career in real estate in the USA, Canada, Mexico or Europe. Choose an agent who has made a career out of marketing real estate. An agent who has taken the classes, received the certifications and has worked to stay on top of their field. Choose an agent that has lots of return clients. Find someone that you feel comfortable with on a gut level. If your gut is saying, “careful something stinks here!” Listen to your gut! Do your due diligence. Check references.

Jim Scherrer – Puerto Vallarta Real Estate

 A buyer’s agent exclusively representing buyers has “no axe to grind.” A true buyer’s agent has no listings and no biases toward one development over another, i.e., no fiduciary duty to any seller or developer. The buyer’s agent must be honest, loyal, fully knowledgeable of the market, familiar with all the key players in any real estate transaction, and an experienced business professional.

Linda Neil – La Paz Real Estate

A key step in avoiding various risks is finding a buyer’s agent, who represents only your interests.  An agent who attempts to represent both the buyer and the seller (called “dual agency”) will have conflict of interest; while the buyer is looking for the lowest reasonable price and all the benefits possible in his interest, the seller is looking for the highest reasonable price, and as many benefits as possible in his interest.  It’s not possible for one agent to represent both of these interests.  Besides reducing risks of not being informed of potential problems, hiring an exclusive buyer’s agent will ensure that the agent will search the entire market available, not just properties they are listing.

Some characteristics you should look for in your agent are: professionalism, knowledge and experience – education can be one indication of this, punctuality, which is sign of commitment, someone who listens to your concerns and needs, someone who looks ahead and predicts complications, honesty and cooperation.

Thomas Lloyd – Playa del Carmen Real Estate

There are several items a new buyer should insist from an agent or broker who he hires to represent him. Remember, you want someone who is going to protect you and your interests.

How many years has he lived in Mexico? Does he speak Spanish? How many years has he been working in the Mexico real estate industry? How many real estate transactions has he administered or participated? What credentials does he have? Is he certified? Licensed? Or does he have a Mexico real estate degree? The more years and experience a person has been living and working in Mexico is the strongest asset you can find in your representative. Don’t forget to ask for testimonials, (the more the better).

Who are the key players that will help you reduce your risk when buying in Mexico?

The brokers name certain professionals needed to make the process go smoothly, including a title company, a mortgage company advisor, a notary public, and a Mexican attorney.  Of course, just having these people around will not help.  They must experienced, knowledgeable and reliable.  As the panel points out, this points back to the choice of agent, who is THE key player; the right agent will also be able to help point you to other reliable professionals.

Mitch Keenan – Merida Real Estate

Notary Public. Title Company. Bank, for the fideicomiso. Broker or agent.

Jim Scherrer – Puerto Vallarta Real Estate

Of course, the main key player is the buyer’s agent. After the agent, a mortgage company adviser can be very important; after all, if the mortgage company won’t approve a loan, the purchase is probably too risky! Notary Publics will assure the paperwork and closing details are accurate, however they have no input into contract negotiations. Of course, the agent must be at least somewhat familiar with Spanish and should work closely with an experienced Mexican attorney since all contracts are written in Spanish

Thomas Lloyd – Playa del Carmen Real Estate

The most important key player is an agent or broker with many years of experience. You are not looking for someone who knows where the best restaurants or bars are located, you want someone who has been on the ropes, someone who has witnessed problems or obstacles in previous transactions so he knows what to look out for. A sharp lawyer is your second best ally. Again the more years of experience in real estate law the better.

TOPMexicoRealEstate NETWORK; Mexico’s Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely

In the following interview, a panel of TOP Mexico Real Estate experts answer several questions about projections for the market in the last quarter of 2009 and in 2010.  Each member of the panel shares what they have  experienced in each of their local real estate markets.  While each area varies, the general tone is that 2009/2010 has and will remain a buyer’s market.  ”There are great opportunities so long as buyers know where to search and the buyers have an experienced on site team to help manage risks and have strategies for the purchase of the Mexico Property.” -  Ivan Castillo

The interview includes 3 questions and each one is followed by answers from each of the panel members.

1. How do you see your local real estate market for the last quarter of 2009 and for the coming year of 2010?

Ivan Castillo – Stewart Title Lawyer

The real estate market is starting to move, of course not with the same intensity as past years, but definitely there are some good number of transactions closing. For the next year I see it a bit more stable with developments consolidating, more lenders and Mexico mortgages coming in and more prominent purchasers arriving to the area.

Cyndi Ader – Cancun Real Estate

I think the last quarter of 2009 will be slow for the Cancun Real Estate market. It is typically slow September through Christmas week. I think that it will improve by the end of the year and beginning of 2010.

Jim Scherrer – Puerto Vallarta Real Estate

July was my most active month ever as far as viewers on my website; August was my second most active. It’s obvious that folks interested in Puerto Vallarta Real Estate are doing a lot of reading about living in Mexico; however, few are inquiring about real estate purchasing.
 
When I found out that the developer of a certain magnificent Puerto Vallarta Condo complex was willing to drop the prices by 30-35% from last year’s prices – for example, a new $835,000 condo was selling at $550,000 - I immediately sent out the details to my top 10 buyers interested in the best condos on the beach in the best area of town. I received a few responses.  From my perspective the buyers are still few and far between.  There are currently more than 7,000 new condos left unsold and on the Puerto Vallarta Real Estate market; this means that there are a lot of choices.
  

James Hopkins – Mazatlan Real Estate

This upcoming season in the Mazatlan Real Estate market should be fairly exciting. With the opening of the new convention center, the ongoing construction of many new Mazatlan Beachfront condo projects and the price reductions in our already very competitively valued market, there is great potential.  Interest in Mazatlan remains high and is growing, as Mazatlan was number one in tourism for the 2008-2009 season.

Jaime Niembro – Lake Chapala Real Estate 

 
Our office, Ajijic Real Estate, is the top-selling office in the Lake Chapala Real Estate area so our projection does not necessarily reflect the market in our area, as we are doing well.  Our average, last year and this, has been very satisfactory compared to years before…and we expect to do at least that well in 2010.  

With the recession in the U.S. we expect to see more people from there who are interested in the lower economics of living in Mexico, yet still being close enough to return to family and friends without a great cost of doing so.

Arturo Hernandez – Valle de Bravo Real Estate 

The market is moving.  A lot of rentals – at least 50% more than last year.  A lot of people who first rent here, soon want to live here permanently and end up buying real estate.  High class properties are also on the move; this type of client wants to see things move, so Valle de Bravo Real Estate has a lot to offer them.

Thomas Lloyd – Playa del Carmen Real Estate 

The Playa del Carmen Real Estate market has slowed down when comparing the Spring and Summer to the previous years activities.   It is interesting to note that here in Playa del Carmen we have seen several years with appreciation rates in key neighborhoods above 15%.  Now what is interesting is that many developers and brokers have noticed movements in the market coming from National buyers.  People are stating that 70% of their sales are Mexican versus 30% now coming from non-Mexicans.  We do have an interesting quantity of non-Mexicans who have seen what has occurred in their home country markets where decreases in market values can hover around 15% – 30% and many of these people expect to see similar reductions in the Mexican markets.  But, the first three quarters of 2009 has not copied these decreases to the same extent, the market is soft, but some property rotation and transactions are keeping the sellers with hopes that this winter and spring will bring another new breath of air into the region.  At the end of 2009 I see it remaining slow, 2010 depending on the tourism re-activation it should spur more real estate activity which will slow as in previous years during the last semester of 2010.  In 2-3, and 5 years,  I see a very strong demand which I explain in more details below.   There is a slowdown in my region, but if you are on your toes and work with realtors who have the experience in navigating through these rough waters, (such as the brokers on this panel of TOPMexicoRealEstate Network)  This could actually be a time to save a nice amount of money and set yourself up for some interesting rebounding appreciation potential.   

2. Where do you see some opportunities?

Ivan Castillo – Stewart Title Lawyer

There are opportunities that I’m seeing in the market, such as: i) Purchase Prices are a bit lower; ii)  Purchase Prices are also negotiated in pesos; iii) the developers are structuring fractional ownership in addition to full ownership; iv)  more lenders are coming in the area.

The Mexican Purchasers are very important, just in Cancun 70% of purchasers are Mexican.

Cyndi Ader – Cancun Real Estate

There are lots of reduced prices making for some very attractive deals for both investors as well as end users. Those looking to buy a property for their second home or for their Cancun Retirement are wise to do it now while these deals are available.

Jim Scherrer – Puerto Vallarta Real Estate

The lower priced Puerto Vallarta Condos are in the $200,000- 350,000 range, down from the $350,000-700,000 range of pre-2008. We have some developers that are now promoting fractional ownership, which could offer some interesting possibilities.

The opportunities will be in the expected high tourist traffic, the growing interest in Mazatlan Retirement, the current favorable pricing and the willingness of owners to negotiate. This past summer, we have seen that the smart money has already become aware of these issues and has been buying some of the nicer properties in town.

Jaime Niembro – Lake Chapala Real Estate 

Our high season is coming up as we get lots of “snow birds,” many of whom are interested in a permanent property.  The majority of our sales are to U.S. and Canadian citizens, except for Lake Chapala Land, as many lots are sold to Mexicans.

Arturo Hernandez – Valle de Bravo Real Estate

Many people with different resources available are interested in purchasing Valle de Bravo Land as a secure investment.  There are a lots of ranches, 20,000 m2 and up, which offer packages, with services included such as  golf club memberships, closed areas for horse riding, tennis courts and swimming pools, and have nice restaurants and bars, etc.  It’s an easy home – you come and enjoy living, with no other worries.  Valle de Bravo Homes and Condos of this type are available for around $120,000 dollars.

Thomas Lloyd – Playa del Carmen Real Estate 

In my opinion, Playa del Carmen has 5 – 10 years of continued high population growth.  As many of you understand, population growth is one of the major factors that influence the market value of real estate.  Recently, the state government made an announcement that economic activity within Quintana Roo is the highest or one of the highest for all of Mexico hovering near 7% thus far for 2009 in spite of the fact that the majority of states are witnessing negative growth.  And in regards to tourism and the real estate industry, Quintana Roo is at the top of the list of revenue generation of which reason large amounts of public and private monies have been invested in only the past 12 months into large infrastructure projects throughout the Riviera Maya.  5 major bridges along the highways leading from the Cancun airport through Playa del Carmen, down into Tulum have been constructed during this past spring and fall.  And only a month ago, another major project has been approved within the Playa del Carmen municipality to build a “second floor” highway to ease the flow of traffic coming from the Cancun-Tulum highway and the flow coming from the avenues connecting the west and east side of the city.  Hospitals?  Two years ago a Spanish operator opened up their doors in Playa del Carmen, another major public hospital is within 6 months of opening their doors, and now another private group with funding from the US is in the process to open up their clinic and hospital to specialize in Cardiology and Diabetes.   The opportunities that TOPMexicoRealEstate is finding for our buyers and our investors are from being able to find individual urgent sales.  Some individuals or organizations that have over extended themselves (many times it could be Americans with a second home in the region), are willing to take prices that are equivalent to the market value 2 or 3 years ago.  These are great opportunities if you take into consideration that we have seen 10% appreciation jumps for several years.  This is a lull in the market, or a dip in the market which investors need to evaluate if they feel that our region will either a)  remain stagnant for the next 2 or 3 years, or b) feel that the same growth which was seen over the past 10 years will return and continue over the next 5 years.  In Cancun over 20 years ago there was an explosion of growth where today it has reached a population of over 1 one million people, in Playa del Carmen there has been an explosion of growth over the past 7 years and today it has a poulation of a rough 200,000.  Tulum was just starting to see the start of a repitition of history with their own explosion.  So in my opinion, the odds are in the favor of a buyer of real estate so long as the buyer is able to see beyond 1 or 2 years.

3. Who do you see as the buyers, or what types of properties in your region do you estimate?

Ivan Castillo – Stewart Title Lawyer

Canadian, American and Mexican purchasers are very important; just in Cancun 70% of purchasers are Mexican. In fact some developers are changing there marketing strategies and they are also focusing on Mexican purchasers.

Cyndi Ader – Cancun Real Estate

I am still getting lots of baby boomers looking to buy for a Cancun Retirement although they may not be quite ready to retire. They are taking advantage of the lower prices in this current market. And in Cancun there are some Mexican buyers also looking for the reduced price deals. And the big demand for my market is still beach front or very close to the beach. 

Jim Scherrer – Puerto Vallarta Real Estate

My market is mainly Americans and Canadians.  But the number of baby boomers buying is lower than it has been.  As Ivan from Stewart Title indicated (and they are also accurate barometers of the market), 70% of the buyers are now Mexicans. They typically buy in the lower priced locations and complexes.

James Hopkins – Mazatlan Real Estate

Our buyers are Canadian, American and Mexican. At this point, all are interested in value and our market certainly has value to offer. Our buyers have a broad gamut of interests. Nationals are looking for a second home near the Mazatlan Oceanfront that they can use for their summer vacations, Americans and Canadians are looking for investments and Mazatlan Retirement properties. Mazatlan is a town that has something to offer all of them.

Jaime Niembro – Lake Chapala Real Estate 

We have a great many developments going up, especially gated communities, giving security and privacy.  We expect many who are part-time residents to feel comfortable living there and being able to lock up and leave for long periods of time without undue worry about safety for their property.

Arturo Hernandez – Valle de Bravo Real Estate

Most of our clients are Mexicans living in the capital.  A lot of them are looking for a second home in Valle de Bravo as a healthy way to escape from the big city.  This could also be an attraction for Americans and Canadians looking for a get-away from a busy life style.

Thomas Lloyd – Playa del Carmen Real Estate 

In 2009,  the key buyers have been Mexicans and major developers have been Spanish.  They are leading the investments all along the Mexican Caribbean.   Many non-Mexicans are arriving, seeing what has occurred in their home country or have been reading the financial stress that the world has faced and are expecting similar scenarios here in Mexico.  Yes, there are many areas of Mexico which are facing a tremendous slowdown given the fact that the Mexican economy is very closely tied to its northern neighbors.  But, regions in Mexico, as amazing as it sounds, can also see and witness growth.  The Playa del Carmen Real Estate market is not booming.  But, given that many Mexicans are moving away from larger cities (Mexico City, Monterrey, Guadalajara, Villahermosa) and looking for new opportunities or different life styles; Playa del Carmen Riviera Maya is definitely one of the top five places throughout Mexico where we are witnessing population growth.  (Playa del Carmen has been registered as the fastest growing community in Latin America).   So these population movements have sheltered this region from the greater impacts of the economic downturns and have made good investment havens for those who have properties in the region.   As for developers, Spanish companies have been investing strongly in foreign markets and within our particular region for the past 5 years and this can logically be traced back to Spain’s over-inventory challenges they have been battling over the past five years.  Major Spanish hotels and residential development projects have been growing along the Mexican Caribbean corridor.  Now if we look beyond 2009,  2010.  With the heavy investments in our region’s infrastructure, the attention on preserving the green areas by the federal government, the easy access to long distance transportation, the living comfort and all the first-world services being introduced,  I see a very strong demand coming from retired Americans and Canadians.  Keep a close eye on the growth from this segment and plan your investments accordingly.

Beatriz Lozano, “TOP Mexico Real Estate NETWORK; Mexico’s leading specialists for finding and purchasing Mexican properties safely !” (512) 879-6546 or the company’s web site www.TOPmexicorealestate.com

The Sociedad Anonima de Capital Variable, translated literally is an anonymous society of variable capital.  This is equivalent to the U.S. corporation in which there are stockholders.  In Mexico it is governed by the Law of Mercantile Societies.  More and more, foreigners are forming Mexican mercantile corporations which end with the initials, “S.A. de C.V.”, to do business, to achieve their financial goals and to purchase Real Estate in Mexico.  The SA de CV is similar to the “Inc.” of the United States and Canada.

Another version of a corporate entity is the Limited Liability Company which has become more common in recent years.  The Mexican counterpart is the SRL de CV, the Limited Responsibility company with variable capital.  While there are differences between the S. A. de C. V. and the S.R.L. de C.V., for our purposes here, both are included under the term “corporation” in this article.

As of December1993, the corporation formed in Mexico is considered as “Mexican” even though all shareholders may be foreign persons.

When should a corporation be formed?  It will make sense if the shareholders wish to perform services or sell goods for profit, build a hotel, or if they wish to develop a property for resale in lots or condominiums.  These are all common options seen in my region, the La Paz real estate market.  The corporate entity permits the principals to obtain working papers and to obtain working papers for other foreigners who provide services not easily obtained in the local job market.  Care must be taken, however to set up the financial reporting system, to obtain invoices for all pre-operating expenses and to have an accountant who is knowledgeable to make the required declarations in Hacienda, Mexico’s version of Uncle Sam or Revenue Canada. 

The minimum capital investment in a Mexican corporation is $50,000.00 Mexican pesos.  Evidence of this capital contribution must be in cash or in assets which equal the total amount of the start up capital.  It is important to make the declaration of all assets which are to be included from the start up of the corporation.  Do not select the minimum amount just because it is the minimum.  If you do it may later be difficult to establish the true amount of initial capital invested.  Once the initial capital is established, additional investment may be added by making a declaration before a Notary Public, without requesting permission to do so from the government.  This is the Variable Capital portion of the equation. 

A minimum of two shareholders is required to form a corporation.  These shareholders will be required to sign the corporate charter before a Mexican Notary Public.  If they come into Mexico as tourists to sign the documents they should obtain an FM-3 or FMN document at their local Mexican Consulate prior to coming so they may perform a business activity (signing the document) in a legal manner.  Once the corporation has been formed it is necessary to obtain a federal tax registration number for the corporation and the administrator or board of directors must obtain the FM-3 permit to work in the activities of the corporation.

If the corporation includes or is composed of foreign stockholders it will include a clause in which the foreigners promise to be considered as Mexicans in the eyes of the law and not to invoke the aid of their government in the event of a dispute. 

Administration of matters of the corporation may be either through a sole administrator (administrador unico) or through a board of directors. A Comisario must be appointed.  This is the person responsible for the accounts and tax payments and should be a Mexican accountant.  The comisario does not need to be a shareholder.  The duties of the administrators, whether sole administrator or board of directors need to be clearly defined.  Will they be able to enter into lawsuits? Obligate the corporation for loans? Hire and fire personnel?

Generally it is wise to provide a list of five names, in order of preference, for the corporation for submission for the permit for incorporation.  The first name which has not been used previously by another company will be designated.  Upon confirmation of the name, the corporate documents must be prepared and signed before a Notary Public within ninety days or the authorized name will become invalid and the process must be begun again.  Together with the name request, permission to incorporate, where foreigners are involved, must be obtained from SECOFI, the Secretary of Industry and Commerce. 

Upon completion of the corporate document, it must be recorded in the local registry of Business and Commerce, the National Foreign Investment Registry and the business enrolled in the local Chamber of Commerce or Industry Chamber.  Monthly declarations must be filed with tax authorities.  Additionally, the corporate account must file an annual statement with the National Foreign Investment Registry regarding the business activity for the previous year.  If the corporation is used for property development or is not active, the Mexican accountant will probably charge about $600 Dlls. per year to do the required filings.  If the corporation is active the accounting charge may be $300. to $500 Dlls. per month, or more.

Author Linda Neil has over 35 years of hands on experience in all aspects of Mexican real estate. She holds membership in AMPI, NAR, and FIABCI and PROFECO Certificate 00063/96. Current member of the national advisory board of AMPI she is the owner broker of LINDA NEIL PROPERTIES for more information (512)-879-6546 THE www.TOPmexicorealestate.com NETWORK

“Mexico’s Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely!”

In the Mexico real estate purchase process, the ONLY authority permitted to draft a deed transferring real property or an interest in real property (such as the Mexico Bank Trust) is the Mexican Notary Public This person is different from a Notary Public in the United States where a simple exam, bond, and a rubber stamp can make a Notary Public out of most people Nor it is similar to Canada's Notary Public who must meet a few more stringent requirements to qualify Not so many, however as the Mexican Notary

The Notary Public in Mexico must be an attorney, must have a minimum of five years of practical experience in the profession, must pass a highly technical examination AND then be appointed as a Notary Public by the Governor of the state in which he or she is working The number of Notaries Public depends upon the number of people in the state A new Notary is appointed only as the population grows above a certain size the Mexican Notary Public has many duties, but one of the most important is the drafting of deeds for transfer of real property Anytime a signature is required on a deed of transfer it must be made before the Mexican Notary Public

As of now, foreigners buying and selling their rights in the La Paz real estate market, in the Cancun market, or any property within the “restricted” zone, through fideicomiso rights, do not always have to appear before the Mexican Notary Public in order to transfer their interest in the real estate These transfers in many cases may be made by having instructions signed in the buyer or seller's place of residence and “legalized” or “authenticated” for use in Mexico This same process can be used for a power of attorney document in the event buyer's or seller's signature is required And what is a “legalized” or “authenticated” document

No matter what the document, it must be signed before a Notary Public in the place of residence; California, Arizona, Calgary, Vancouver…..or wherever Once signed before the Notary Public in the place of residence it must be “legalized” or “authenticated” in order to be considered as valid in Mexico This means that a designated public official performs a government act and certifies to the genuineness of the signature and the seal, and the position of the official who has executed, issued or certified a copy of a document

In 1981 the Convention abolishing the Requirement of Legalization for Foreign Public Documents entered into force in the United States Under the Convention, (signed in the Hague, Holland), signatory countries, including both the United States and Mexico, but not Canada, agreed to mutually recognize each other's “public documents” so long as such documents are authenticated by an apostille, a form of internationally recognized notarization The apostille ensures that public documents issued in one signatory country will be recognized as valid in another signatory country

Thus, if the document required for a Mexican transaction has been notarized in the United States it must then be sent to the nearest office of the Secretary of State and an “Apostille” obtained A search under state government in the yellow pages should reveal the telephone and location of the closest office of the Secretary of State The document to be authenticated through an Apostille can probably be sent through the mail and should not cost more than $25.00 U.S. dlls.

It is important to allow for extra time to accomplish this step Other countries that are signatories to the Hague Convention are, to name a few; Germany, Argentina, Australia, Australia, Austria, Bahamas, Spain, Israel, France, Greece and Norway.

All countries which are not signatories to the Hague Convention, such as Canada, must authenticate documents to be used in Mexico by obtaining a “legalization” or ratification of their document from the nearest Mexican Consulate It maintains a list of authorized Notaries with samples of their signatures and is able to ratify the authenticity of the Notary's signature

Many people object to the time involved and the additional step required to “authenticate” a signature for legal use in Mexico It is less expensive and less time consuming, however, than making a special trip to Mexico in order to sign a document before a Mexican Notary

Author Linda Neil has over 35 years of hands on experience in all aspects of Mexican real estate. She holds membership in AMPI, NAR, and FIABCI and PROFECO Certificate 00063/96. Current member of the national advisory board of AMPI she is the owner broker of LINDA NEIL PROPERTIES for more information (512)-879-6546 THE www.TOPmexicorealestate.com NETWORK

“Mexico s Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely!

Mexican law says that Mexico real estate taxes must be paid on the higher of the following: purchase price OR appraised value Since many appraisals in the La Paz real estate market are lower than the actual selling price your taxes will be condisderably lower if the appraisal value is declared Payment on this basis has taken place for many years in many parts of the country It is, however, illegal

Should you choose to pay your Mexico real estate taxes based upon this basis, please be aware that: 1. it is violation of the law and 2. your tax base will be low for declaration of value in the property when you sell it Furthermore, if you are financing your property through an institutional lender, full value must be declared

Mexico Official Appraisal:Most appraisals in the La Paz real estate region are made by an appraiser who is usually an architect and who is recognized as a Perito Valuador, Official Appraiser, by the property tax authorities in the municipality where the property is located This is required prior to completing any transfer of title If an institutional lender is involved, a commercial appraisal may also be required You can follow more of these tips at TOP Mexico real estate blog

Author Linda Neil has over 35 years of hands on experience in all aspects of Mexican real estate. She holds membership in AMPI, NAR, and FIABCI and PROFECO Certificate 00063/96. Current member of the national advisory board of AMPI she is the owner broker of LINDA NEIL PROPERTIES for more information (512)-879-6546 www.TOPmexicorealestate.com

“Where 11 TOP real estate experts from ALL regions of Mexico come together to share their Tips & Knowledge to help you buy safely !”

The Mexico real estate market has gone through various changes over the last several years Title insurance, escrow accounts, and financing are new options and tools now available to help the non-Mexican acquire La Paz real estate properties and even properties throughout various regions of Mexico.

Until recently, most Mexico homes and condominiums were for sale for all cash or financed by the seller With the advent of NAFTA however, several mortgage companies have entered the Los Cabos and Cancun real estate marketplaces and offer long-term financing for qualified buyers If you are considering financing your purchase, and are buying in a location where financing is offered, it makes sense to investigate the terms and plans available, select the company of your choice and make lender approval a condition for the purchase

If the seller will be financing your purchase, request that title be transferred to you and a pledge guarantee contract executed guaranteeing payment Traditionally, sellers have preferred to hold title to the rights in their name and transfer title to the rights only upon receipt of payment in full from the buyer Meanwhile, however, the seller may die, may disappear, may go bankrupt… a risky situation for the buyer The prudent buyer will insist upon a transfer of title and registration of a mortgage or pledge in which he gives his rights in the property as security for payment of the remaining purchase price In the event of default by the buyer, the seller must conduct a proceeding similar to a judicial foreclosure in the United States and Canada It is troublesome, as is any foreclosure in any country in the world but not notably more problematical The registered title and recorded pledge or mortgage provide the buyer a greater comfort level in his investment The lender also enjoys protection in having his loan recorded and will have an established legal proceeding to follow in the event of default by the buyer

Author Linda Neil has over 35 years of hands on experience in all aspects of Mexican real estate. She holds membership in AMPI, NAR, and FIABCI and PROFECO Certificate 00063/96. Current member of the national advisory board of AMPI she is the owner broker of LINDA NEIL PROPERTIES for more information (512)-879-6546 www.TOPmexicorealestate.com

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