Published On: Thu, Jun 25th, 2015

Current Nature of Real Estate in Mexico, A Southern Gentleman’s Opinion

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I was sitting in my chair on the beach today, after I had spent the whole day talking to about twenty people about real estate here and about maybe retiring here. This American walks up and tells some people, “Guess what I am in real estate here now.” He was with another Gringo, and I think they both had been drinking, and one of the guys is somebody I always see drunk around here, and he is in real estate. The guy said, “I will do all the talking, and this guy here will handle all the paperwork.”

So I am sitting and I got to thinking to myself, every American and Canadian in town is now selling real estate. Now this is on top of an American who just got arrested by the Federales and ran out of town for embellezing money from his real estate client’s escrow accounts. This guy basically used money from his clients escrow accounts to finance his lifestyle, and when asked he told them yes, I spent your money. Now being an American living here, this pisses me off, and makes all of us Americans look bad.

Mahahual Boardwalk (Photo: mexicorelax.com)

Mahahual Boardwalk (Photo: mexicorelax.com)

I have met and know several people that this guy has ripped off, and I feel for them, and hopefully they will get their money back one day. I doubt they will , because he has escaped the country and is now back in the USA, I heard. I used to see this guy all over Facebook in Playa del Carmen on yachts, and living the good life on other people’s money, and I knew something was not right.

Right now in the Yucatan Peninsula and all over Mexico, we got a lot of people from the USA and Canada, running around trying to sell real estate the 3 or 4 months they are in town. They prey on the people who come to Mexico to look around from the USA and Canada.. I have had these people try to hard sale my clients that I have brought down personally at some of the “Gringo” functions here. One lady from the USA is very bad about it, and trashed me and the company that I write a blog for to some people I had down recently. These people know nothing about the nature of real estate business in Mexico or its procedures, but are trying to make a quick buck at the hands of naive Americans and Canadians.

These people trying to sell real estate, circle around like sharks when they spot new people in town. They try to push all their friends and anything they can ( like scuba diving) to make a quick buck off of new people in town. They act nice at first, but if you do not do anything with them, they ignore you from then on. I have had numerous clients tell me this, and not everyone is like that here, just a certain crowd. We have a joke here if you do not do business with this one pushy woman, she will not let you sit at her table anymore when the “Gringos” are playing. We call it the “cool kids table” like in high school.

We also have a lot of what I call “carpetbaggers” here down from the USA. If you don’t know what a “carpetbagger” is, then you have never seen the movie “Gone With The Wind”. Basically “carpetbaggers” from the north invaded the south after the Civil War in the USA, with big bags of cash trying to cheat people out of their land they had possesed for generations. There is one American running around town telling everybody he is buying up every good piece of real estate here, so far I don’t think he has bought anything.

The Yucatan Peninsula is getting pretty popular lately so we now have people coming down from the USA trying to cash in by any means possible. This is a sad fact of becoming a popular tourist and retirement destination, you attract what I call “carpetbaggers”. A lot of these guys are promising to build condos, and other properties. What they are really doing is finding a property for sale like $115,000 usd, and just add $10,000 usd, sell it for $125,000 usd, to some unsuspecting American or Canadian, pocket the money, then they go back up north after high season is over.

So as an American who has lived and worked in the Mexican Caribbean and Belize now going on five years, it pisses me off the way these people are trying to conduct real estate business here (unlicensed and without a work visa). I have worked in the coast of Quintana Roo for 5 years now, and I have seen my share of people trying to get rich here selling real estate come and go. They usually last 4-6 months and then they suddenly leave town. Case in point the last woman from the states selling real estate here did not last long, and went back to the USA.

Mahahual Quintana Roo (Photo: Playas Mexico)

Mahahual Quintana Roo (Photo: Playas Mexico)

I will have more on my blog in the future about this subject, but today I want to urge anybody looking into real estate here in  Campeche, Yucatan, Quintana Roo or anywhere in Mexico, do business with a reputable company a member of AMPI equivalent to National Associations of Realtors (NRA) and Canadian association of Realtor (CAR) not some American or Canadian you drink with. You would not buy real estate from a non license proffesional or shady, fly-by-night company in the USA or Canada, so why do it here in Mexico? (Quintana Roo and many other states in Mexico now require a real estate license) so ask your realtor are you license and a member of AMPI.

I can honestly say, I, myself, or any of the Mexican companies that I deal with has ever stolen ANY escrow money from a client, or screwed over any American or Canadian customer. Be very careful of buying real estate from someone who is only here 3 or 4 months a year, because if you have questions or problems, they will not be around, cause they’ll be up north.

So if you are looking into real estate here, do not be afraid to deal with a Mexican company, they are not the ones you have to worry about, trust me, it is the Americans and Canadians running around trying to make a quick buck you have to worry about.

I hope I have not discouraged anybody from looking into buying real estate here or considering retiring here in the Yucatan Peninsula or anywhere else in Mexico, that is not my intent. Mexico is a great place to live and real estate is a good bargain here, just be very careful who you deal with, use some common sense, and don’t buy real estate from someone here just because you drink or party with them, do your research, ask questions, do your homework, be professional.

I thought long and hard before I wrote this blog. I decided since I am from the USA it was my duty and obligation to speak out on this subject matter. I do not approve or condone some of the behavior that certain Americans have been doing down here lately, and hope it does not continue, because in the end it will just scare people away from doing business in the Yucatan Peninsula and Mexico, and that would be a shame.

beach

Buying real estate in Mexico dos and don’ts

Can a Non-Mexican Own Ocean-front Property in Mexico?

Yes, in Mexico exists the “restricted area” which runs inland 50 km (32 miles) from the ocean front and 100 km (60 miles) from any border. In this area, non-Mexican nationals cannot purchase property outright in their own name. However, the following two methods provide legal alternatives and are used by thousands of foreigners to own property within this area.

+ Fideicomiso: is basically a bank trust. Is a legal alternative to freehold title and lasts for 50 years from the time of establishment, with further 50 year renewal permitted. The Fideicomiso owns the property and the foreign purchaser is the beneficiary of the trust.

+ Corporation: is a legal entity unto itself, recognized by State and Federal Governments, and has similar rights to an individual, including the ability to own real estate. There is a minimum requirement of two shareholders in order for the company to be formed and maintained. They both can be foreign. only to be used in a business venture not for fulltime private residence.

What are the property taxes?

These are the annual real estate taxes. Real Estate Taxes in the Yucatan in general are considerably lower than in the US or Canada. You should check during the purchasing process for the exact amount to be paid, also try to pay them early on the year since you can get discounts.

Should I get an “Avaluo” (appraisal) of the property I am trying to buy?

Definitely, some times the owners trying to sell their property take advantage of foreign people, that’s because of the “perception” they have on foreigners. Right now is a buyers market, you should be able to negotiate on a better deal if they know first hand that you hired someone to go look at the property. Ask first if you can do it and watch the reaction of the Realtor.

What about the Title? How Do I know it is Clear?

There are several checks which are performed with government agencies to ensure the title of your property is clear. There is a certificate that can be issued to certify that there are no liens or encumbrances on the property. It is called “certificado de libertad de gravamen“, this is a MUST when buying property.

Do I need to have a Will in my home country and in Mexico?

It is better if you have a Fideicomiso on the terms you can have beneficiaries when you pass away, on the other hand the corporation cannot function if one of the shareholders dies, and the “beneficiaries” in your home country would have to do a lot of legal procedures for them to claim the property back in Mexico.

It’s somewhat cheap to have it made, on September law firms offer discounts as it is the “Month of THE WILL”.

Can I trust lawyers or Real Estate Agents asking for a wire transfer for a down payment on the property?

This is really tricky, I strongly suggest to check the reputation of this people and try to get email confirmation from the person receiving the payment, also add the purpose of the money. Look where you can find them, address, telephone, etc…or better yet work with a escrow company like Stewart Title or first American title both available in Mexico.

Well that’s it for now, I hope you guys post questions and I’ll be more than happy to help you…

Thanks for reading,
www.costamayalife.com
Stewart Rogers 

stewart_rogers

 Stewart E. Rogers Jr. originaly from Greenville South Carolina, grew up in Germany, Japan,  and all  over the USA. University of South Carolina 1980 BA in Journalism. Now a resident  of Mahahual, after living in Belize for 2 years, love the Caribbean, eat, work, live with  Mexicans and Mayas. Love Mayan ruins and history. Expert on Belize and Quintana Roo.      Not your typical expat. Webmaster at www.costamayalife.com

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  1. Mitch Keenan says:

    The fideicomiso can be renewed every 50-years (or for whatever period of time therein described) in perpetuity. A property held in a fideicomiso could literally be handed down for generations.

  2. John Neal says:

    Interesting topic. I am in the Merida and while I have not had a problem in the Real Estate area, I have had a problem with a US owned computer shop in Progreso. I have now been trying to get my money–or computer–returned for the last 6 months. I have not wanted to cause trouble for a US expat but soon will go to Profeco and other authorities for help. It is a shame. No problem with Mexican business people but my fellow US citizens are the scammers.

  3. Lance says:

    NOT “very well said”, as Mr. Hodgson wrote. In fact, it is so awkwardly written as to make me wonder how you managed to get a journalism degree from the University of South Carolina. Not likely even Clemson, where one only has to be able to read seed catalogues to graduate. However, your warning is useful and warranted.

  4. Cristy says:

    Thank you…
    Good one…
    We would loce to meet you!!

  5. Carl says:

    Who was the guy in Playa del Carmen that ran off?

  6. Sarah Ross says:

    Wow such a negative article about Mahahual. Seems what your advising is only buying from Mexican realtors. Not sure this article will help the sluggish real estate market in Mahahual. Not very happy that you chose your debute here to say bad things about our town. Guess you don’t like it here very much. Most of the people that live here regardless of where they are from chose to live here because they love our beautiful little town. And no not all Americans and Canadians that live here sell real estate.

  7. Cristina says:

    Thank you for all the advice! I like when people speak about the real life there and what to look for… After all, we want to know the truth. Great article!

  8. Will says:

    BUYERS BEWARE. AMERICAN REALTY AND CHRISTOPHER RAUTON ……REAL IBIZA CONDO”S AND TOWNHOMES TURNKEY PACKAGES…PRICED AT $85/$130 THOUSAND USD
    TURNKEY MIGHT SOUND GOOD FOR A SLICE OF ‘PARIDISE…WHAT THEY ARE NOT TELLING YOU IS THAT THE ACTUAL CONDO’S/TOWNHOME ONLY COST AROUND $30/$50 THOUSAND USD TO CLOSE….YOU DO THE MATH…IF IT SOUNDS TO GO TO BE TRUE THEN IT IS…

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