A good realtor down in Mexico is incredibly valuable. In your home country, you probably have a level of confidence. You understand how the laws are there to protect you. However, now in another country, you’re walking into a completely different ball game. There are risks of buying a house without a realtor. You are lucky that the law is very mature and very protective of all the parties in this country. Still, I wouldn’t want to take risks, especially on my first purchase.
Being a foreigner real estate buyer
The first risk is that you are American or Canadian. You’re going down to buy real estate in a different country. For me, that’s the number one risk right there. You, as the buyer, are a novice in the real estate game. Then you add undefined factors that you need to manage when investing and buying real estate with a high-ticket price to risk such a significant investment. So one of the things you should do is start creating a team, and the first step is to get a good realtor.
Suppose you’re in Mexico and then just meet a guy on the beach or in a restaurant, and he’s selling his property for sale in Puerto Aventuras. Your idea is to go and purchase directly from him. The risks of buying a house abroad become higher.
In that case, he could be a professional. He knows all of the transaction rules, where likely he’s a realtor selling in this house. Another high probability is that he might not have ever sold to a non-Mexican buyer. Because there, the steps are different from when you’re buying as a non-Mexican.
You need an expert to coach you, someone on your team to guide you during the process, instead of working with another most probable novice. Thus, both are going to stumble and waste time. You are both going to have a lot of headaches and concerns and stay up at night stressing.
The following reason is that you could end up with incomplete or incorrect documents. The seller needs to provide various documents, and you do not have a realtor to guide you. On this, you’re rolling the dice. We don’t know if the seller knows what documents he needs to present or if you’re on the timeline.
Suppose you’re traveling back and forth internationally. The last thing you want to be doing is arriving expecting to go to the notary public to sign the legal real estate ownership transfer, and it turns out that the seller forgot that you needed some document. Therefore, you’re going to have to change your entire travel plans and take another risk of having to travel back. So the risks of buying a house without a realtor is much higher if you’re dealing with a non-professional.
I witnessed once where the seller, without a realtor representing him, was not even aware that he would pay capital gains tax. So when he sits down at the table to sign and sees what he must pay in taxes, he suddenly changes his mind. Consequentially, he needs to leave.
On several occasions, a realtor representing the seller has not done a good job and has not prepared his seller for all of these factors that we mentioned before. It seems logical to me and let it serve most American Canadians reading this, but knowing your expenses is the first thing you must define.
The risk of the seller selling the property several times
Well, with the realtor on your team, he will guide you. That this occurs is very minimal just because of the laws in Mexico. The 32 states of Mexico do a substantial-good job of defending property rights. One of the primary instances is a public registry.
Upon any property sale, once the notary has witnessed, authorized, and approved the legal transfer. Once he made sure the buyer transferred the money to the seller and agreed on the payment process. Then the property rights are legally transferred and approved by both parties, with the notary public as their witness again. The next step is to take this transaction and capture it in the public registry.
If the seller wants to sell it to a different party, the legal processes check if the property is directly in the seller’s name or if he has already sold it.
But again, the buyer’s representative understands this, and he knows whom to contact. Also, he knows how to look up the due diligence of the property before proceeding in the closing process, before the buyer continues doing expenses to acquire the property. Additionally, the due diligence or assurance that the proprietor can sell the property and he hasn’t committed this property to another party.
The seller does not return the money.
There are two transactions where you’re dealing directly with the developer, and it’s at pre-construction. The typical agreement is that you have to make some payments directly to the developer. You need to protect yourself from what happens if the developer isn’t able to continue the construction process and therefore cannot deliver a property that they promised to you on such a date.
So, if you’re dealing directly with the seller developer, you might have signed a promissory contract without any clauses that can protect you in such a situation. Now, suppose you’re working with a buyer’s representative with many years of experience and a good buyer’s lawyer. In that case, they’ll be able to review the contract and give you solid advice on what is lacking in the agreement to protect you in various situations.
Also, to have it very clear, the management of the money, how it does get returned, what happens if it doesn’t get returned in a timely matter, interest rates that they should charge, and even another penalty on delayed repayment. There are many things that the professional buyer’s rep can do and will do to represent you, to protect your money.
The sellers change their minds
There are various steps that a seasoned realtor, a realtor with experience, knows what to ask from the seller and most likely from the seller representative.
One of them is to prepare an excellent promissory contract. The promissory contract locks in the seller and locks in the buyer. But it defines what occurs if the seller cannot come to the table with a notary public on such a date and be prepared to legally transfer the property’s rights. The definition is because, usually, there is a penalty, and the penalty is sufficiently expensive to be 20% or 30%. It could even be 50% of the value of the property. That ensures that the seller will arrive prepared to transfer the property rights on such a date.
The other tool that helps a buyer avoid the seller changing his mind is the escrow. Instead of sending the money directly to the seller, you send it into an escrow account where a professional third party manages the money. The money is released to either party according to the conditions outlined in an instruction letter.
Look for an expert
Like anything, I always recommend going with an expert. Get the best expert, the best coach you can find, and in this case, the best realtor you can find. And with his experience, he’s going to guide you, telling you what things to avoid, look for, and what kind of contracts are necessary.
This realtor is going to be able to introduce you to a lawyer. He’ll introduce you to a property manager, a notary public, etc.
So, many sellers or buyers might not even know that these tools exist and which of them helps reduce the risks of buying a house to the very minimum possible. Contact one of our buyer reps at Top Mexico Real Estate and don’t take any risk. You will have a smooth experience and will enjoy the entire process of buying your dream property.
Remember…We make it happen