Mexico Real Estate Industry in Penasco.

Discussion in 'Real Estate' started by Roberto, Aug 6, 2018.

  1. Roberto

    Roberto Well-Known Member

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    I'm reposting the information below from another thread here because I think it is very important. There may be some small errors in interpretation but I believe, through personal experience, it is accurate and useful.

    When people in the business say they have rectified titles to enable the sale of a property but there was nothing wrong with them it's absurd. Look up the meaning of rectified.

    Any information like this (about sales figures) you find in Penasco is generated by Realtors and is subject to all sorts of distortions. The so called MLS is created by and managed by the local realtor's association and is not an independent organization that verifies the accuracy of their reports as in the US. It is a variant of the Point 2 system available to anyone to establish a "real estate sales company". Google it and see. Fox guarding the henhouse comes to mind. There have been several serious episodes of fraud and misuse of the so called AMPI MLS system with no action taken by the association. Reporting sales and activity is completely a voluntary system and in fact bears little resemblance to reality.

    Yes, Licenses are issued in Sonora but there is little to no enforcement. You will see reference to a Broker but this is a title offered by the Real Estate agency and has no legal definition or responsibility, it is usually the named owner on the required Mexican corporation papers. AMPI has absolutely no legal position in terms of enforcement. It is mainly a fraternal organization in Mexico, used as a sales tool here in Penasco. Local realtors have created the idea that it is a Board of Realtors, US style. It is not. They have some responsibility granted by the State of Sonora to oversee the testing procedure for licensing but they do not issue licenses and do not have the power to revoke one. I am unaware of anyone ever failing to obtain a license. There still may not be an actual comprehensive test, attendance was all that was required for years. You could sleep through the sessions with no consequences. The license is used as a sales tool.

    At what point a property is publicly reported as Sold is unclear and up to the realtor, there is no independent agency tracking this system or information. An agency that wants to show lots of sales may declare the property sold when a deposit check is passed. Under Contract is probably a more accurate description. The fact is the property is not actually sold and transferred until the bank trust or Fidecomiso is issued and registered, a process that can take years to complete and just one reason that bank financing is unavailable here. It may be 'hand written' at the Registry at that point. At the juncture in the process that the Notario examines and certifies the required paperwork and issues a letter of instructions to the bank the sale may be considered a legal sale for transfer.

    Many so called sales never result in an actual transfer of ownership because the supporting paperwork is not available or provided to the Notario. Meanwhile the sales commission has been paid and is never refunded. In general when the Notario issues a request to the bank for a Fidecomisso, the sale is good but the bank can take years to process and issue the Fidecomisso.

    Escrow means the check goes into the realtors checking account and not to a licensed, bonded independent professional agency. Actual millions of dollars have been stolen by so called Escrow Companies, Closing agents and realtors over the years. Buyers should be aware that they can and should pay all necessary fees and taxes directly not passed through a third party. This is a simple process and is risky to permit a third party to have access to these funds, costs. The Notary will require evidence of payment but collects only their direct fees. Question the costs.

    Real estate transfers in Mexico must be accomplished by a Notario who certifies that the property in fact is owned by the seller and can be, and is, legally sold and transferred by Fidecomiso or Mexican title to a specified buyer and that all legally required fees and taxes are paid. The process in NOT the same as in the US and any buyer should take the time to educate themselves about the process. Talk to the Noratio not an agent or so called Broker. Ignorance of the process has supported and created the massive fraud that has occurred over the years. Why someone would transfer huge sums of money on the basis of an unenforceable, worthless piece of paper is beyond me. They would not do it in the US but have done it here.
     
    Estero, PintoPoint and Ed B like this.

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