Wednesday, July 15, 2009

it's only money, right?


I get a lot of questions about property, the first one is "can you own property in Mexico?" If I had a dollar for each time I have been asked that I would be a wealthy man. The real estate business down in Mexico has been evolving and is an interesting experience depending on who you know and who you ask.

The interesting thing now a days how the "new guard" of real estate sales people are attempting to capitalize on the people that are considering to purchase property for their retirement.

When we bought our land, that was an interesting experience. We were shown a strip of land, walked all 8 hectares of it and fell in love with it!

Had nice views, great assortment of trees and the price was nice. So, as we get ready to do the deal, the salesman informs us that the property that we walked was not the property that is for sale.....

As William Bendix on the Life of Riley would say, "Wow, isn't that a revolting development". Well I think that's what he said, it was too many years ago and my memory is getting diluted with not sufficient memory space, need to expand the gigabytes.....

It turned out to be the property south one parcel that was the for sale.
Real professional eh?
Well that was just the beginning.....

Back to the issue at hand. Looking at ads for homes on various sites, Craigslist listings, Century 21 Mexico and others, you see tons of properties and prices.

Lots of the homes are as expensive or more so than US prices.

Someone is making some nice cash. I don't think it is necessarily the property owner. What I have seen is a lot of opportunistic individuals who are making money more so than what would normally be called reasonable. I think the word for it is gouging, flimflam, overcharge are a few words that instantly come to mind.

If I can instill one thing to anyone who asks about property is one thing. Do your research and see if you can get someone to help you with the transaction or at least know what the reasonable pricing is for similar properties.

We were lucky we had a few friends who we trusted, one in Guadalajara and one in Morelia. Had we not done some prior work, I know we would have both overpaid and been taken advantage of beyond belief.

Looking at prices there are properties that have lots of fluff built into the price. Some are reasonably priced for the area, construction and size.
Others are not.

We have been offered bare land for reasonable prices and some not. At one time we were considering a Mazatlan condo and that is where I found the prices vary as much vendors in your local mercado.

Recently there have been tons of ads enticing Americans to buy now before the prices go up, buy now since the monthly living expenses are cheap, cheap , cheap.

It is interesting to see the prices of homes that we have seen being sold by locals, and then seeing homes in the same neighborhood being advertised for twice, and three times the price.

But there is always someone who seems willing to pay for it. So maybe they deserve the deal they get.
On the other hand, many Mexicans put up for sale signs just to find out what the offers may be and know that should they need some money that maybe, just maybe they will fetch that same amount with a serious buyer.
Maybe not.

10 comments:

Steve Cotton said...

And then there are the real estate agents (mainly American and Canadian) who sell nothing but a bunch of beans. Some friends told me that a real estate agent in Puerto Vallarta told them that the whole bank trust business was going to go away in a year -- guaranteed. I thought they must have heard incorrectly. So, I followed up. The agent told me the same thing. I followed up after the election. His tune is unchanged. If PAN would do it, PRI will do it. Good for business. His, I guess. And foreigners think it is true because they do not know. Your advice is perfect. Check with people who really know what is going on. And, if it sounds too good to be true -- cut me in on the action.

Constantino said...

There are crooks everywhere, just like there are honest hard working people likewise. Sadly it seems we only see the crooks....

Felipe said...

If you are property-hunting in Mexico via English-language websites and/or you are given prices in dollars, not pesos, which is the lucre of the land, you will be overpaying for sure.

The best way to do it is to never show your Gringo face until the price is settled upon, even though that will not always work. Sometimes the friendly locals will jack up the already-agreed-upon price on seeing a Gringo face.

When my wife and I bought the land where we built our house, I simply was not in the picture, literally. My wife and brother-in-law, both Mexican, did the preliminaries.

Then I showed up later. It worked. Paid a fair price for what we received, I think.

Inmigrante Rentista said...

Stay away from those who speak English when purchasing property. The crooked real estate agent/owner I was dealing with purchased a unit here in the same complex a few years ago for $491,158 +/-. Now it’s advertised for sale at, are you sitting down, $950,000. That number just happens to be the top end allowed for bank loans. But of course it has upgrades added ….. Wal-Mart lighting and curtains ……

Constantino said...

It is interesting to scan the listings and ads. Anyone who pays those kind of price deserve what they get.
If you want a chuckle you would not believe what some homes in SMA and Chapala are asking.

I guess they keep asking, since sooner or later someone will pay that....

Babs said...

There were a lot of speculators and real estate agents who swarmed into San Miguel in 2004 and 2005 to buy for a "quick" flip. Over 1200 properties are for sale - many have been so since 2006. MANY of those greedy b------ got left holding the property and couldn't sell it now for half of what they paid for it. Serves them right.
The prices keep going down, down down. I guess the old adage that you can always go down on the price but not up causes them to list high and hope some sucker will buy at that but they are prepared to half the price if just ANYONE would come along right about now. TRULY.

Constantino said...

Nice to know that they are holding the bag for a change.
I don't criticize anyone for making a decent profit, but the gouging that occurs is hard to fathom. It's hard to imagine 1200 properties for sale, wow! That's a lot of housing inventory.

American Mommy in Mexico said...

As a renter I have not entertained purchasing - it makes me nervous to even think of it for all the reasons outlined in this post and in the comments. I would be taken for sure!

Constantino said...

Mommy, you would not be the only one, many have been already. One of the problems is that there is little professional groups that have any kind of ethics rules or enforcements.
Just try and sue someone here, if you think that stretching out legal work NOB happens, down here much goes on deaf ears, and there is always the personal "touch or bite" that gets things like justice personalized.....

ac said...

wow! am I glad I read this post. Thanks folks!
ac