Looking for the Perfect Home

“Mid pleasures & palaces though
We may roam,
Be it ever so humble,
There’s no place like home.”
John Howard Payne

Roberta Delgado Giesea

The search for the perfect home begins for many people with the world-wide web. Key words to input into search engines are: Baja, Mexico, Baja real estate, Mexican homes for sale, investing in Mexico, and Rosarito homes for sale, Mexican real estate and so forth. The adage, “Let your fingers do the walking” can apply since a buyer, with his fingers flying across the keyboard of a computer while sitting in the comfort of his home, can find properties on the market in Mexico. Color photos, prices, and amenities are listed.

“Honey, look at this house in Mexico. It’s not only the exact style I want but it’s priced within our budget,” Mrs. Smith says to her husband while searching the internet from her home in New Jersey.

“I’ll contact the agent and we’ll make plans to fly down to Mexico to view it in person,” answers Mr. Smith after studying the color photos of the house.

All too often there’s no answer to Mr. Smith’s inquiries because the agent in Mexico has not accessed his emails in days. He’s busy with clients who are viewing homes in person and has no time for computer work. By the time the agent answers the request, the house has already sold. Some properties are never displayed on the internet because they sell before being posted on the web site. “My webmaster takes two or three weeks to post new listings,” complains a real estate agent. Perhaps the Mexican “I’ll do it mañana” plays a role in the webmaster’s delay.

“Please send me photos and brochures of your properties for sale,” Mr. Smith requests of a real estate agent, not realizing he’s contacting a person in another country who may not have access to an efficient mailing system or, for that matter, copy machines. Mailings usually require a trip to the States, so agents prefer customers to be satisfied with photos on their websites. Although Mexico is catching up to the world of technology, it is still behind. It’s difficult for those who live with advanced technology to understand that in a different country some jobs requiring machines or mailing in another country are sometimes more difficult to accomplish.

Although there are fledgling attempts to centralize current listing data by such Mexican real estate organizations as APIR or AMPI, there is no computerized MLS data base that covers the Northern Baja area of Rosarito, Tijuana and Ensenada. With little or no data base, selling prices are known only by those who make the sales. However, within each real estate organization, agencies share their listed properties with each other so members can have a chance to sell other agents’ listings. As a result, homes shown on a website are not necessarily the only properties an agent has at his fingertips to show a prospective client.

In addition, an agent may know of “pocket listings” to show a buyer that is not shown on the website. A pocket listing is a property that is not formally listed. The Mexican way has traditionally been an owner saying, “I won’t list my house exclusively with one agency, but if you have a buyer, please show my house. Mexican sellers prefer all agents to sell their property as a pocket listing, incorrectly believing they will get more exposure for their property. Usually the owner’s expected price is unrealistic, making the property difficult to sell. Real estate agents will not put a lot of effort into selling this type of property, but if they happen to remember it as a pocket listing, they may show it to a buyer whose requested criteria is a match.

US sellers prefer exclusive listings that will expose the property to a wider market. They understand that 6% of the selling price is the common commission offered to a listing agent so that he may include other agencies in the marketing of the property. There will be enough commission for the listing agent to split 50-50 with the selling agent. The buyer, of course, doesn’t pay the agent a commission and probably doesn’t care about the commission. His interest is in finding his dream house at a price he can afford.

Often a buyer will bounce from one agent to another under the assumption the only properties the agency can show are his own listings. Agents, while talking to other agents, will sometimes find out they are all working with the same buyer. This shot gun approach doesn’t elicit an agent’s desire to spend a lot of time and effort with a disloyal buyer.

Buyer broker contracts and agency disclosures are not used as a rule in Rosarito. In fact, agents who have not sold real estate in the States don’t know even know what they are. The use of such paperwork will probably evolve through time as real estate sales become more sophisticated.

Although certification classes are being promoted, licensing of real estate agents is not required in Northern Baja, Mexico. A Mexican can say, “I think I’ll sell real estate,” and may do so. The paperwork he uses to write up offers needs to be cleared by the consumer advocate Profeco organization, and he needs to be licensed by the city to do business, but otherwise, he is free to work as a real estate agent. Foreigners, however, do not find it as easy. Mexico reserves its jobs for Mexican citizens, but it will allow foreigners to work after obtaining a special working visa.

When Mr. & Mrs. Smith arrive in Mexico, they will start looking for their dream home on site. They will meet the agent or agents with whom they corresponded through emails.

As they view properties with their agent, they find some houses look better in the internet photos than in reality. The dirt roads leading to it and the shack next door were not in the photos. They are disappointed.

They meet several agents but decide to be loyal to the one whose personality and knowledge appeals to them. They keep looking for properties with this agent who understands their needs, believing that chances of finding something they like in their price range may be slim. However, they remain hopeful.

Eventually their agent says, “There’s a new listing that meets all your criteria. Let me show it to you before anyone else sees it.” When they view the house, they know it’s the perfect one for them. They finally find their dream home in Mexico!

The search that started on the internet has paid off. The Smiths find the home of their dreams because their real estate gives them special treatment. They are on site and ready to view a newly listed home before anyone else has a chance to see it.

The search for the perfect home is over.

It is time to obtain answers to the following questions:

1) Is the neighborhood in keeping with the selected house? What is the future of the neighborhood? Or the empty lot next door?
2) How close is the nearest grocery store? Fire department?
3) Is it a guarded, gated community?
4) What are the Homeowner’s Association dues? What does it include? Is there a reserve?
5) What are the Codes Covenants and Restrictions or CC & R’s?
6) Are all the utilities in? Is there a pila (water reserve tank?) Telephone? Cable?
7) Is there a sewer or septic?
8) What is the history of the house? How old is it? Have there been illnesses or drug issues connected to it?
9) Is the furniture included in the sale? If so, an inventory list should be included in the paperwork.
10) If the house is oceanfront, ask to see a map indicating the lay out of federal zone. Is there a concession in place? What is the monthly fee for the federal zone concession?
11) What kind of a title does the property have? Is it bank trust? Leased Land? Escritura?
12) Does the owner’s name match the name of the seller on his ownership papers?
13) Is a structural inspector available to hire to inspect the house?

Question #11 is the most crucial question to have answered. If the owner has an escritura, it means that he owns it with a fee simple Mexican title. It will be possible to get a bank trust on it but the buyer will have to generate a new bank trust. If the owner has a bank trust in place, then it can be transferred to the new buyer. The length of time left on it becomes crucial. If there are less than 20 years, the new buyer may want to generate a new one that is valid for 50 years. If it is leased land, all the risks have to be revealed to the buyer.

Once the questions are answered to the satisfaction of the buyer, it is now time to make an offer.