Mexico Real Estate Myth: “I’ll get the Best Deal If I contact the Agent who is advertising the property.” – FALSE!

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