One of the most common questions I get asked here is who would be a good Realtor to talk to, should one want to explore buying property in Costa Maya. My response is not really what they want to hear either, and instead, is what they need to hear. Usually not the same thing, but they asked! I start by telling them to rest assured, properties get bought and sold here fine and that process, the title research and legal recording, is done by a Notario, not the realtor. This assures the most critical part of the transaction, a clean and secure title to your property, is properly done. The marketing and contracting part of the process is done by the local realtors, and that is usually the source of transaction problems, or even worse, issues that rear their ugly head after the sale is done and recorded. Safe to say, most transactions get done, not because of the realtors, but in spite of them. Know what Mahahual realtors are and work with them cautiously and smart, and you will be fine. They are not without some value, but it is little and unless you understand the difference in the role they play, and the terms they use, you will most likely be paying too much for bad service.
Most of the realtors in Mahahual are nice people and if you want to pay 6%-10% for their being nice, then go ahead and do that. Not my advise though. I was a licensed Realtor in the US, so I very much understand what you pay that commission for in the US, or Canada, who has an almost identical process and apparatus. Part of your commission goes to pay for the creation of legal contracts that National Associations have had hundreds of the very best real estate attorneys write, assuring legal and fair transactions, that protect buyers, sellers and the brokerages. Same for contracts that provide proper representation, property disclosure, secure trust funds and on and on. Not to mention errors and omissions insurance and legal protection should problems arise. These things cost money to produce and implement. These documents and standard procedures are so well done, the legal side of the industry really does run itself. Not here!
In the US and Canada, your commission pays the cost of putting your property into a multiple listing network (MLS) with thousands and thousands of professional, well trained and regulated Realtors who can potentially sell your property for you. This database, is the source for determining your value, both for the sale, but also for an entire appraisal industry. A critical piece of a properly running real estate market. No MLS here, or even community cooperation for that matter. That commission also pays for huge, often nationwide, professional marketing apparatuses. Here you get a realtors low volume web site, personal network and perhaps some paper fliers stuck to the walls of a local restaurant. Again, it is worth something, but not 6%-10%!
When you start to look for property in Mahahual, remember that almost all the property with real estate company signs on them are not “listings” in the same sense you are accustomed to hearing the word used with the professional real estate companies in the US or Canada. The legal arrangement between the seller and the realtor is often nothing more than a verbal agreement to pay a specific commission, and permission to put a sign up. Some even get that in writing and call that a “listing”. Since the term comes from and implies a MLS, multiple LISTING service, my question then is, where are they listing it?? Oh, that’s right, on their web site and those paper fliers I mentioned. That is not a listing and you as a buyer are not part of that arrangement in any way, and it is important to remember that. They do not legally represent anyone, you or the seller, which also means that any commission paid them is between them and the seller.
It is also important to remember, that in addition to the sales commission realtors here expect, you still then have to pay several thousand dollars in Notario fees. The Notario is a government attorney with the legal power of a judge regarding matters of contracts and contract processes. The Notario is who will research the chain of title to assure it is clear and that there are no encumbrances on the ownership title. The Notario is also who will legally move the ownership from the seller, to the buyer, and actually oversee that process. In the US and Canada, the process is so uniform, and the contracts and history data so easily found, that Title Companies do all of that, as part of issuing the Title policy. Here, you pay the Nortario to do that. Again, an extra cost for work usually done as part of the standard commission or the regulated process. From my bar stool, that looks like a cost that should come from the sales commission here in Mexico too.
Having said all this, my advise is to simply apply the golden rule to your unregulated real estate sales process. That is, he who has the gold, rules. As the buyer, you have what everyone wants, the gold. That is your leverage and something I think buyers need to use in such a market. And here is how.
First, get your own professional representation. I suggest an attorney or accountant, who can direct you how to purchase the property so you get a smooth process, but also how it fits into your overall plans or portfolio, as well as the long term capital gains you will be subject to when you eventually sell the property. Poorly informed buyers often try to sell their properties here years later, only to find out that because the way the sale price was reported at the purchase, the 30% capital gain tax eats up all their profits. If your realtor can’t explain why the sales price on your deed, and the contract or the price you pay, are not the same, then run from them. If they can’t explain why a “basis” in the US or Canada, are not the same in Mexico, and how they differ, run from them. Better said, just run from most of the realtors here in Mahahual.
So are there any Realtors in the Mahahual worth talking to? Yes, but not many, in my opinion. Companies like Costa Maya Real Estate have long histories in Quintana Roo selling mainly their own development products and can provide very sound and solid legal advice. Because they sell mainly their own developed product, properties in Nuevo Mahahual for example, their process is typically clean, smooth and easy. There is also a Century 21 office, an international company with a full team of legal backing that can provide sound information and also assure your transaction process is somewhat familiar to what you have experienced in the US and Canada. They also have their own training, which, still short of industry wide training, is far more than most of the commission hounds who call themselves realtors have. Between that and the legal support apparatus that comes with such a large global company, they can provide solid service. Both companies are Mexican owned and the Realtors are Mexican professionals, not foreigners who know little about Mexican laws, traditions and cultural nuances needed to successfully operate in Mexico. Would you buy real estate in the US or Canada from a Mexican who doesn’t even speak English??? How about one that also does not speak “Realtor”???
Quintana Roo is slowly moving toward a more standardized and regulated real estate industry. Realtors are now required to at least be registered into an official professional registry, a good start. The recording of your sale price accurately is also being addressed, with an “appraisal” needed to justify the reported price. Given that an appraisal relies on an MLS for accurate data, this step is little more than an dog and pony show, but it at least recognizes that a problem exists in the process and is moving in the right direction to remedy the problem. And there are laws currently on the books about collecting “commissions” as they relate to tax and immigration laws, that are also beginning to be enforced to further push the amateur commission hounds out of the industry. Things just take more time here, must be “Mexican Time”, but problems do tend to work themselves out eventually, and the regulation of real estate purchases is no different.
As I said, local realtors are not without some value and to some degree, you as a buyer determine that value. My suggestion is to use the local realtors to help you locate your property, after all, they are the “boots on the ground ” source and that is worth something. Should they show you a property they have “listed”, and you want to make an offer on that property, consider them the seller’s agent at that point. In the US or Canada, that is worth half the commission, but here, because of all I have stated above, I think it is much less. Your call though since you have the gold and are writing the contract. Have your representative make the offer with a stated commission for the seller’s agent that is worth what they have done. Finder’s fees, not legal anywhere, Mexico, the US or Canada, are usually around 1/2%, which means perhaps another 1% for their gas and “marketing apparatus” is what I would think is a fair commission for what most local realtors do. Add that to the representative and notario fees you pay, and you will be around a 6% commission. Again, from my bar stool, that looks fair!
Don’t be afraid to buy real estate in Mahahual. It is a great investment, one you can enjoy and accomplished easy and professionally if you are careful. Just hire a pro to represent you and to make sure the purchase process is in your interest, and is understandable and fair. The Notario that closes your escrow (your representative can help you choose the Notario) will assure your purchase is proper, and your title is clean. Then you can begin to build that nice investment that recreational property can be, and work on your tan at the same time. How nice is that!