Los Gatos-Saratoga: Realtors learning about ‘Doing Business with Mexico’

Thirty members and guests of the Silicon Valley Association of Realtors attended “Doing Business with Mexico,” the second of a series of programs hosted by the local trade association’s Global Business Council. Real estate professionals shared valuable information on both inbound and outbound transactions involving the country, cultural differences and discounted several myths.

Panelists included Nancy MacLeod, real estate broker/owner of Homes2Buy.com, who owns a villa in San Miguel de Allende, where she also represents buyers from the U.S.; Alicia Sandoval, a Realtor with Keller Williams Realty in Palo Alto and native of Mexico; Amber Neil, a Realtor with No Borders Realty in San Jose, who has dual U.S. and Mexican citizenship; and Sal Covarrubias, sales manager for First American Title Company, who discussed title vesting concerns, proper identification needs for sellers and the differences in holding title between the U.S. and Mexico.

The California Association of Realtors’ 2014 International Home Buyers Survey found buyers from Mexico make up the third largest group of international buyers in California at 9.1 percent, after China (36 percent) and Canada (11 percent). According to the National Association of Realtors, Mexico has consistently been a top investor in U.S. real estate over the past 10 years. On the outbound investment side, Mexico is the No. 1 destination for Americans and baby-boomers that retire abroad, with over 1 million Americans residing there.

The best approach for Realtors seeking to tap into the Mexican market would be joining AMPI (Asociación Mexicana de Profesionales Inmobiliarios), the real estate trade organization in Mexico. Travel to Mexico and networking are key to learning more about the real estate business there and AMPI would be a good source, said the panelists.

“AMPI has ties with the National Association of Realtors and is strongly advocating for the licensing of real estate agents in Mexico. Right now, anyone can be a real estate agent there,” said Sandoval.

Neil added, “It is expensive and complicated to do business in Mexico. You need to have a visa and a work permit. It’s best to do business via referral, but make sure you are dealing with a reputable agent, preferably a member of AMPI.”

Covarrubias said issues regarding Mexicans buying property in the U.S. are similar to that of other foreign buyers. “Timing is important, and whether the foreign buyer will be personally present at closing. Also, agents need to verify their client’s legal name. It may not matter much when the client buys the house, but it will matter when it is time to sell the property,” said Covarrubias, adding title insurance in Mexico is not standardized like the U.S. American title insurance is needed for new construction, for example, while only Mexican title insurance can be used for a resale.

Real estate transactions can take months to conclude in Mexico, so when Mexicans buy U.S. property they are shocked when the process is quick and closing can be as soon as three or seven days. Also, there is no disclosure when buying property in Mexico, so Realtors need to take time to explain the transaction process to their Mexican buyers.

“Mexicans are very social and want to get to know you personally first before deciding to do business with you. They value social graces, mannerisms and respect,” said Neil, “and they are not keen on email or text. They want a one-on-one conversation with you, eye-to-eye, and many meetings.”

Like any country, there are places that are dangerous, but MacLeod attests, “Mexico is still very safe, especially the tourist areas and places like San Miguel de Allende.”

Sandoval said while payoffs were prevalent in the past, business there is now done in a more professional way.

Lastly, don’t believe you have to sign a 99-year lease and can’t own property in Mexico. “I’m not sure where that myth came from,” chuckled Neil.

Information is presented by the Silicon Valley Association of Realtors at silvar.org. Contact rmeily@silvar.org.