Baja Real Estate
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Category: Business & Finances
Contact Information
Mexico
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Baja Real Estate Reviews
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July 12, 2008
risky
Research using the words complaints, and problems before buying in Mexico. There are over 600 court cases that have been filed in the last 14 months against developers in the northern Baja area, and the number will be in the thousands soon. Many have put down deposits for homes and condos that have never been built, or sold to multiple buyers. The scams are endless. Never believe what you see on real estate companies web sites. Coldwell Banker of Rosarito is one of a dozen recent bankrupcies filed in the San Diego area leaving hundreds of customers with six figure losses.
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August 8, 2007
No requirements for agents in Mexico
This is from this site:
http://www.bajainsider.com/baja-real-estate/real-estate-truth-lies.htm
Lic. J.E. Beaulne, LL.B. provides us another interesting article about legal terms in Mexican real estate.
I conducted a personal survey on this matter and found that 90% of the salespersons are not qualified when it comes to the legal matters during a real estate transaction in Mexico and, to cover their ignorance they just simply lie instead of saying “Sorry I do not know”.
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I have found this to be true of all the websites posted by the real estate agents in order to lure foreign investors to Baja. They do not inform buyers of the need for caution. In fact, they try to make it sound like waiting to make a decision will cost. This is not true, especially now that the market has taken a drastic downturn. My agent did not even suggest I offer less on the property I was negotiating. I went back a few weeks later and offered $250,000. on a house the seller was asking $275,000.00 and they settled for $263,000. and paying $15,000.00 of the closing costs. The agent I had gone to was letting me take the asking price. What kind of help is that. Read more Baja real estate complaints to get a clearer picture of the situation.
This is now a buyers market. But remember it is always buyer beware.
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August 7, 2007
No laws which regulate the sale or management of real estate in Mexico!
This is important information. Don't listen to agents and sales people who want to make a buck off of you. Baja real estate guide for homes, land and condominiums for sale in Rosarito Beach, Los Barriles, East Cape, Cabo San Lucas, Tijuana, Ensenada, Mexicali, Tijuana, La Paz and Loreto.
Buyer Beware: Be advised that there are no laws which regulate the sale or management of real estate in Mexico and abuses do exist. It is always prudent to ask for local references and obtain competitive bids for all services when possible.
The Mexican Constitution prohibits direct ownership by foreigners of real estate within 100 kilometers (about 62 miles) of any border, and within 50 kilometers (about 31 miles) of any coastline. In order to permit foreign investment in these areas, the Mexican government has created a trust mechanism (contrato de fideicomiso) in which a bank has title to the property, but a trust beneficiary enjoys the benefits of ownership. The Bank Trust Agreement (contrato de fideicomiso) allows for renewable long term leases that may be sold or enjoyed by your heirs.
A foreigner may be the sole and exclusive stockholder of a Mexican corporation which may hold fee simple title to non-residential property in the prohibited zone. There is a broad definition for "non-residential" property.
Buyer Beware: Mexico real estate prices that seem too good to be true are usually too good to be true! Many of these "bargains" are located on what is commonly referred to as "Ejido" or communal tracts of land. It is highly recommended that you consult with a Mexico attorney regarding Ejido land rights. Any agreement between the "Ejido" and a foreigner may be revoked or canceled without cause, notice or recourse!!
Caution: Mexican law recognizes squatters' rights, and homeowners can spend thousands of dollars in legal fees and years of frustration in trying to remove squatters who occupy or rent their property. Always inspect the property and be certain that your property is not occupied by a Mexican citizen in any manner whatsoever. Anyone who occupies the property on behalf of the owner should be totally removed/gone from the property prior to closing. Warning: A Mexico citizen may simply refuse to pay rent and continue to occupy your rental property for a long, long time - maybe years.
American property owners in Mexico should exercise caution when hiring employees to serve in their homes or on vessels moored in Mexico. Several American property owners have faced lengthy lawsuits for failure to comply with Mexican labor laws regarding severance pay and social security benefits.
Caution: Exercise extreme caution when considering time-share investments and be aware of very aggressive tactics used by some time-share sales representatives. Buyers should be fully informed and take sufficient time to consider their decisions before signing time-share contracts, ideally after consulting an independent attorney. Mexican law allows time-share purchasers five days to cancel the contract for unconditional and full reimbursement. U.S. citizens should never sign a contract that includes clauses penalizing the buyer who cancels within five days.
A formal complaint against any merchant should be filed with PROFECO, Mexico's federal consumer protection agency. PROFECO has the power to mediate disputes, investigate consumer complaints, order hearings, levy fines and sanctions for not appearing at hearings, and do price-check inspections of merchants. All complaints by Americans are handled by PROFECO's English-speaking office in Mexico City at 011-52-55-5211-1723. You might also complain about the lack of an English translation for the PROFECO web site.
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August 1, 2007
Very poor service!
What I Learned the Hard Way About Mexican Real Estate. Problems at Las Olas Mar y Sol:
BY MICHELLE MARINA
Gringo Gazette
Ed Note: The Gringo Gazette is unable to obtain comments from Alex Crosthwaite, because he instructed us not to ever call him again. If Mr. Crosthwaite will accept our phone calls, we will report his comments.
I am a US based real estate agent, and I have sold nine condos at Las Olas Mar y Sol to US clients. I feel that anyone should be able to ask and receive answers to real estate questions without fear of receiving threats. I and my family have been threatened by Mr. Crosthwaite, the developer at Las Olas Mar y Sol, I have not received my commissions, and at this point most of my clients are asking for full refunds.
I stated before that I would be the first to say if Mr. Crosthwaite has fulfilled his obligations. So I hereby report that he did refund Mr. Rich Soranno’s $10,000 earnest money deposit. However, it took countless phone calls, attorneys, and press exposure to achieve this. Also, I now have two other clients that are requesting refunds, but neither Mr. Crosthwaite nor his agent Gustavo Torres (Remax-Baja) has responded to those requests. I have not received my commissions because Mr. Crosthwaite has ordered me to write a favorable statement about him, subject to his approval, before he will pay me the money he owes me. I stand firm that I will not write a favorable letter just to collect those commissions.
I submit to the public the following list of questions and issues that created the problems with Mr. Crosthwaite. I invite the public to judge for themselves whether these are questions that others should ask, and whether my life should be put in danger for asking them.
1. Trust Agreement. If the contract states “Promise of a Trust”, then what kind of trust is being promised? Is it a Real Estate Bank Trust or an Administrative Trust? There is a huge difference between the two types of trusts.
2. Exhibits. If the contract refers to Exhibits, they should be attached to the contract and provided to the buyer for full review.
3. Upgrades. There should be a price list of upgrades that can be added.
4. Homeowners Association Fee. What will be the amount of the dues, what is included in the fee, and will the homeowners take control of the Homeowners Association eventually, or will it be controlled by the developer?
5. Actual Closing Date. The contract states that the Trust Agreement will be executed within 24 months after the execution of the contract. What if the building is not complete?
6. Initial Earnest Money Deposit. The contract stated that "said earnest money will simply be held and then returned when 30% down payment has been placed". Does the term "simply held" mean that the check will be cashed or not cashed?
7. Notary. The contract states that the Trust Agreement shall be executed before the Notary Public appointed by the developer. Why can't the Notary used be of the buyers choice?
8. Release of Funds. The contract states that money is to be released by the Title Company to the developer at certain stages of construction. If so, then why aren't the buyers notified when the funds are released? If money is being released, who is checking to see that this part of the construction has actually been started?
9. Unit Re-sales. Las Olas Mar y Sol requires that re-sales go through his company. Why would he sell your unit before he sells his own?
10. How many towers will be going up at this site?
The following additional items are things that are not related to Las Olas Mar y Sol, but that I have learned while trying to buy real estate in Mexico:
1. The Spanish Version of the Contract Applies in Court. Buyers should not necessarily believe that the contract says the same thing in English and Spanish.
2. Select your own Attorney to review your contract. Do NOT hire an attorney that is referred to you by the developer!
3. Construction Bond. Ask whether the development is covered by a construction performance bond.
4. Disclosure of relationship between your agent and the developer. If your real estate agent or that firm has a partnership in the development, they do not disclose this to you! This may be the main reason that they are trying to sell you a particular development!
6. Get it in Writing. For agents, get your commissions due you in writing at time of contract. For buyers, if you make any additional agreements with the developer, get it in writing! DO NOT assume that they will honor any verbal agreement.
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July 30, 2007
What sales agents and developers don't tell you!
I saw a show on CBS Sunday Morning about the Baja Dream. I went to a Coldwell Banker Baja office thinking since it was an American based company I could be safe. I ignored what I saw about getting legal council. I put $5,000. down to hold the property, being told that I would get the check back when I sent the down payment to them. A few months after sending the down payment I discovered Coldwell Banker cashed the check. When I called them they said the developer told them to use it for commissions. I had a receipt, but the deposit was not mentioned in the contract. Then the developer never delivered the house. They said they could not build it and they would give me a lot instead. The contract said they would deliver the house in November 2005, tentatively. The word tentatively gives them all the time in the world. A good attorney reviewing the contract would never have let them put that word in. There were many things about the contract my attorney said should not have been there, but I did not have him before I signed. Now I have him trying to get my money back. So, don't think you are smart enough to do this on your own, and don't trust the real estate agents or developers, they have a vested interest in the sale.
I want to alert others that it is very important to listen to the advise of agencies in the United States about how to buy real estate in Mexico. I did not, and now I have a lawsuit.
Here is a link to a pdf file published by the State of Arizona real estate department. It explains the differences in buying real estate in Mexico and the U.S. especially Arizona:
http://www.re.state.az.us/PUBLIC_INFO/Documents/Consumer_Guide_MEX.pdf
You will understand why it is important to use an attorney, not just a real estate agent.
I say this, because I went to Coldwell Banker in Baja, and decided not to use the attorney. I wanted to save money. I thought I could research on my own on the Internet. Short version of the story, I now have an attorney, and a lawsuit to recover my deposit and damages. Though I was told my $5,000.00 deposit would be returned when I put down my down payment, Coldwell Banker cashed the check. They said that the developer told them to use it for commissions. I had a receipt for the deposit, but nothing in the contract about it. They also did not have my down payment put in an escrow account. I thought Coldwell Banker could be trusted because it was an American company. Again, learn from my mistakes, and follow the guidelines.
This is from the United States State Dept. website, http://travel.state.gov/travel/cis_pa_tw/cis/cis_970.html#real_estate
REAL ESTATE AND TIME-SHARES: U.S. citizens should be aware of the risks inherent in purchasing real estate in Mexico, and should exercise extreme caution before entering into any form of commitment to invest in property there. Investors should hire competent Mexican legal counsel when contemplating any real estate investment. Mexican laws and practices regarding real estate differ substantially from those in the United States. Foreigners who purchase property in Mexico may find that property disputes with Mexican citizens may not be treated evenhandedly by Mexican criminal justice authorities and in the courts. Time-share companies cannot be sued in U.S. courts unless they have an office or other business presence in the U.S. Consumers should contact a Mexican attorney, the Mexican consumer protection agency PROFECO, or other consumer information agency for information on companies that operate outside of the U.S.
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July 28, 2007
Poor service!
I was sent this link from a friend who knows I was thinking about buying in baja:
http://www.thesqueakywheel.com/complaints/2007/JUL/complaint15574.cfm
The complaints I found when searching for Mexico real estate complaints, Baja real estate complaints, and about the developer I was thinking about buying from had very important things for me to think about. I think I was getting caught up in the hype of what the sales people were saying instead of taking the time and being objective about the costs, and the risks. I don't want to be stuck with a property with chronic problems, in a foreign country with no government protections. I am glad that these warnings were available for me. I am complaining about the lies and scams that are being promoted as fact by the Baja Real Estate community. It is important to understand these people have a lot to gain by getting us to go there and buy. It would be a good deal if there was a government that provided services and agencies for consumer protection. If the realtor and seller don't deliver the product they say they are selling there is no board of realtors to help you. The realtors are not licensed. There are no inspections of construction done by government building inspectors on houses or condominiums. When you see eroded concrete in the area it is because contractors were able to water it down and install it without using qualified workers. Americans are spoiled, we assume there are oversites. There are no oversites on Mexican construction. The people who are realtors are not going to tell you this unless you know to ask about it. In ten years the new construction of today will be riddled with major problems. In Real Del Mar you see it in houses that are only a year or two old. I would say buy a lot and build your own home, but take an American engineer to inspect the lot and do soil compression tests because they are selling lots that don't have the proper compaction to support a house , so the foundations crack and move. Don't trust the sales people, there is NO way to hold them to anything they tell you. You are walking into a lawsuit in a foreign country if you don't take a lot of time first, and use a Mexican attorney before you buy. There are many scams where Americans put deposits on property of $5,000. to hold it and even though they were told they could get it back, they don't. The whole process is riddled with risk from the beginning to the end. This is true in Rosarito, Tijuana, Loreto, all Baja. I believe it is true in all Mexico. Ask about how the realtors, builders, etc. are regulated, and what your rights are, and who will help you if you have a problem. If you don't ask about this first, you will be in major trouble later.
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July 27, 2007
Discloser of problems not required!
If you buy property that a seller is getting rid of because of structural problems, they do not have to be exposed. So if someone tells you they are only selling because they want to live closer to their grandchildren, you move in and find out that the foundation is eroding, because the ground is unstable, you have NO recourse. That is what happened in Real Del Mar in Baja. It is truly buyer beware. Have an expert inspect any property before putting money down. You will be spending good money after bad to either fix it or try to sue. But if the person has left the country, and the transaction happened in Mexico, you have to get them to go to Mexico in order for you to sue them, and they have to have assets in the area of Mexico that you can trace. You really need to think about the differences before thinking about taking the risk. If you want to live there, rent.
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July 18, 2007
Poor service!
I agree with people who are writing about the low quality of construction in Baja real estate. Baja real estate would not pass inspection in any county in the United States. Baja real estate developers cut corners even more than U.S., because there are no inspections or follow up. Anyone serious about living in a country that is becoming even more hostile towards Americans, should only build their own house, and supervise every board and nail. Baja is a scary place to live. Last spring three policemen were beheaded by drug cartel thugs in Rosarito Beach. You would have to be crazy to buy Baja real estate.
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July 9, 2007
WARNING about buying in Baja!
I have seen numerous new complaints posted against developers in Baja. The business practices of Real Del Mar, Frisas Construction, Jose Luis Corona, and others are not uncommon. That is why the United States Government warns American citizens against buying in Baja, or anyplace in Mexico. They can not help you when you have problems. Do research. Research your developer in Google. When I was first looking at Real Del Mar, there were no complaints about them or Frisas construction on the Internet. People were slow to put them up. Now I see some. If you have had problems with your property, it would be good to post the issues on complaint boards like these. The important thing is NEVER buy a property in Mexico, NEVER sign a contract in Mexico without the advice of a GOOD Mexican attorney.
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