| So, you've reached a point in your life where you | | | | stretch of the imagination to consider many of |
| think that you've learned a little about business, | | | | the real estate agents or associates in PV as |
| finance, contract negotiating, real estate, etc. and | | | | "Professionals". |
| have at least a layman's knowledge of law | | | | AMPI schedules periodic conferences, conducts |
| pertaining to each. Being that savvy, you might | | | | educational programs, and holds various meetings |
| also be aware of the incredible retirement | | | | where they attempt to keep their members and |
| locations and values south of the border; | | | | the public current on activities in the area as well |
| furthermore, you might even be considering | | | | as changes in the Mexican law as it pertains to |
| Mexico as your retirement destination. If so, you | | | | real estate. AMPI has a code of ethics (some of |
| might as well forget everything you've learned | | | | which are followed sometimes!) and it does |
| and leave your law degree at home! | | | | attempt to establish a uniform set of operating |
| Mexico, as beautiful as it is, has a somewhat | | | | procedures, some of which are in writing, others |
| different way of doing business and a completely | | | | understood but not documented. AMPI brings real |
| different set of laws. Additionally, all legal | | | | estate personnel together in a private, |
| transactions, including real estate transactions, are | | | | non-governmental organization, where it's |
| done in Spanish. Therefore, for those of you that | | | | members voluntarily agree to abide by the |
| may be considering locations in Mexico as possible | | | | organization's statutes and code of ethics. For |
| retirement destinations, the following information | | | | sure, it's better than nothing but still not to be |
| should give you some insight as to how the | | | | confused with or even compared to associations |
| Mexican real estate industry works, list some of | | | | such as the National Association of Realtors or |
| the possible pitfalls, and most importantly, give | | | | NAR in the US. Dual agency disclosure, designated |
| you the guidance required to assure a pleasant | | | | agency, full disclosure, confidentiality, imputed |
| and safe experience. | | | | knowledge and notice, implied knowledge, fiduciary |
| In 1984, we made our first real estate purchase | | | | duty, loyalty, and vicarious liability are foreign |
| in Puerto Vallarta; a condominium in Mismaloya, | | | | concepts to the majority of agents in Mexico. |
| about seven miles south of town. Our second | | | | As an example of differences, the NAR provides |
| purchase, two years later, was the adjacent | | | | it's member agencies with standard statewide |
| condo. A year later, we removed the wall | | | | listing forms, pre-qualification forms, escrow |
| between the two condos and remodeled them | | | | account and earnest money forms, standard |
| into one very spacious three bedroom condo. For | | | | purchase agreement forms, letters of intent, etc. |
| thirteen years, while still working in Houston, we | | | | The NAR has written and enforceable guidelines |
| thoroughly enjoyed visiting Vallarta two or three | | | | regarding the handling of commissions and the |
| times a year. | | | | sharing of commissions between the selling and |
| At some time between the purchase of the two | | | | buying agents. In Vallarta, there are no such |
| condos, we noticed that our original escritura (legal | | | | forms provided by AMPI. Each real estate agency |
| property documentation similar to a title or deed | | | | has it's own listing form, which clearly depicts the |
| that is held in a fidecomiso or bank trust) showed | | | | listing agent as receiving 100% of the commission |
| the property value to be about one third of what | | | | upon sale of the property. Although there are |
| we actually paid for it. When we inquired about | | | | guidelines for commissions, they are still to some |
| the discrepancy, we were told that the lower | | | | degree negotiable with the seller. The listing agent |
| value was used in order to reduce our annual | | | | can then negotiate commission sharing with the |
| property taxes. The same was true when we | | | | buyer's agent. |
| purchased the second condo. | | | | All other forms vary from agent to agent and |
| It wasn't until many years later, when we decided | | | | are not necessarily written in the best interest of |
| to sell the condo, that we learned that capital | | | | the buyer. Also, all forms and contracts for North |
| gains taxes were due on the huge difference | | | | Americans are in English; however the Spanish |
| between the selling price and the documented | | | | version is the only document that has any legal |
| purchase price. Ouch, we owed substantial taxes | | | | standing in Mexico. Therefore, regardless of what |
| on a paper gain, when in fact, there was very | | | | you read in English, a Spanish speaking attorney |
| little real gain! We then learned that the condo | | | | should always represent you along with your |
| developer entered the extremely low sales prices | | | | agent. |
| on all the escrituras in the condo complex in order | | | | Another major difference between AMPI and |
| to evade paying substantial capital gains taxes. As | | | | NAR has to do with the Multiple Listing Service or |
| we later learned, the developer could have | | | | MLS. In the States, the MLS is controlled and |
| entered the selling price, the appraised value, his | | | | monitored by the NAR and is available to all NAR |
| cost of construction, or just about anything | | | | agents. In certain Mexican cities, including Vallarta, |
| imaginable into the escritura, and we, naïve | | | | there is an MLS however it is not controlled by |
| North American property buyers, were at his | | | | AMPI. Instead, it is privately owned and operated |
| mercy! | | | | by a local publisher and is available to the public at |
| So, what happened upon the sale of our condo | | | | no charge. AMPI members are able to list their |
| you ask? Well, our wonderful realtor just told us | | | | properties on the Vallarta MLS, with the general |
| not to worry, no problema; she handled all the | | | | public as well as the other AMPI members having |
| paperwork during the selling process and merely | | | | access to the listings. |
| forwarded the phony valuation figures to the new | | | | Once you understand the inner workings of the |
| escritura held by the new uninformed buyers, | | | | real estate industry in PV, you need to learn a |
| thus it became their problem when they decided | | | | little about Mexican real estate law. It is very |
| to sell. | | | | complex regarding trusts, escrows, mortgages, |
| Upon the sale of the condo, we bought a beautiful | | | | treatment of taxes, etc. and is often open to |
| new mountainside villa with a panoramic view of | | | | interpretation by a federally appointed attorney, |
| Banderas Bay, El Centro, and the Sierra Madres. | | | | known as a notario. A small percentage of the |
| We saw the new villa advertised in one of the | | | | realtors in Vallarta have a fair understanding of |
| local magazines and asked our realtor friend to | | | | Mexican law as it pertains to real estate |
| show us the property. He showed us what | | | | transactions; however the vast majority of them |
| seemed to be, every property in town, before | | | | are sorely lacking in this field. Even with little or no |
| reluctantly taking us to see the villa in the | | | | knowledge of the law, they will be anxious to |
| magazine. Some time after buying the villa, we | | | | advise you, right or wrong, thereby looking like |
| learned that our friend the realtor, received only | | | | "Professionals". The best law for you to follow is |
| 10% of the commission on the sale because that | | | | caveat emptor, buyer beware! |
| was all the listing agent was willing to pay. The | | | | Because of the many pitfalls that a buyer can |
| listing agent ran the ad in the magazine and didn't | | | | encounter while purchasing real estate in PV, we |
| feel that an agent representing a buyer was | | | | learned over twenty years ago that it is wise to |
| necessary. Therefore, our agent spent a couple | | | | interview realtors with scrutiny, keeping in mind |
| days showing us properties listed by his agency | | | | that most all will be promoting their own listings |
| before caving in to our demands and taking us to | | | | first and meeting your needs second. It's just |
| the villa of our dreams; one that we have | | | | human nature and with virtually no control in |
| thoroughly enjoyed for more than a decade. | | | | Mexico, it's pretty much assured. Also, because |
| These experiences revealed the tip of the iceberg | | | | almost 100% of them have listing agreements |
| and after living here for ten years, we've finally | | | | with the sellers, they are legally bound to act in |
| been able to expose the entire iceberg and share | | | | the best interest of the sellers, and not |
| some of the details below. | | | | necessarily in your best interest. Because the |
| To begin with, there are no licensed real estate | | | | buyer usually has no contractual agreement with |
| brokers or agents in Mexico! In fact, there is no | | | | the realtor, he will in all probability get the "short |
| mandatory licensing for real estate agents in | | | | end of the stick" in this conflict of interest. |
| Mexico because the Federal legislation process has | | | | Of all places, in Mexico you should select an agent |
| yet to accomplish it and therefore it remains in | | | | that is 100% dedicated to helping you find the |
| limbo. So, exactly what are the qualifications for | | | | property that meets your needs and satisfies |
| being a broker or agent in Mexico? They are | | | | your requirements; preferably, a contractual |
| essentially the same; one must know how to | | | | agreement with an agent with no listings, no axe |
| read and write, have free time and the ability to | | | | to grind, no ulterior motive, and is exclusively |
| put a "For Sale" sign in the front yard or show a | | | | representing buyers and their best interests. |
| listed property, and should have access to a car | | | | A true buyers´ agent in PV should have no |
| and be able to drive. In Mexico, the term "broker" | | | | property listings, should have complete access to |
| refers to the boss or the owner of the agency | | | | the Vallarta MLS, should know the areas and |
| and the term "agent" refers to the employee. | | | | growth trends in and around Vallarta, should be |
| With the booming real estate market and | | | | able to professionally negotiate on the buyer's |
| economy in PV that exists today and the | | | | behalf, should have a decent understanding of |
| qualifications listed above, it's quite obvious why | | | | Mexican real estate law, should have a working |
| we have such a diverse group of agents and | | | | relationship with the local notarios, real estate |
| brokers in Vallarta. The off-the-cuff babbling by | | | | attorneys, escrow and title agents, mortgage |
| many of the agents is so often inaccurate or | | | | bankers, insurance agents, inspectors, appraisers, |
| misleading that it can easily result in placing the | | | | and lastly, your representative must have a |
| buyer or seller in intolerable predicaments. | | | | thorough working knowledge of the local real |
| In order to have some degree of continuity from | | | | estate industry and understand the idiosyncrasies |
| agent to agent, a voluntary association for real | | | | associated with it. |
| estate personnel has been formed in Mexico. The | | | | Buying your dream home or condo in Vallarta |
| Associacion Mexicana de Profesionales | | | | should be one of your best experiences, however |
| Immobiliarios, A.C., known as AMPI, is quite active | | | | without due diligence, it can be a nightmare. |
| in Vallarta, although membership in AMPI is not | | | | Obtaining an exclusive buyers´ agent with |
| compulsory and has no bearing on the capabilities | | | | 100% dedication to you is a prerequisite for |
| of the agents representing the buyers or sellers. | | | | assuring a pleasant beginning of your retirement in |
| You'll notice the "P" in AMPI stands for | | | | Paradise. |
| "Professionals", however it would be an extreme | | | | |