The “Wild West” of Real Estate in México
Here are some “facts of life” about the real estate business in México:
- The environment is extremely competitive!
- There is no multiple listing service (MLS).
- There are no licensing requirements for real estate sales personnel.
- There are no laws defining ethical real estate practices.
- There is no forum to resolve consumer protection complaints (e.g., fraud, negligence), short of an outright lawsuit.
Some realtors who came to México with a license from elsewhere continue to abide by ethical guidelines (e.g., disclosures, etc.) that govern real estate practices elsewhere. Others do not.
Rarely does a seller sign a written listing agreement or an exclusive agreement. Some have been known to refuse to pay a commission even when a realtor has successfully marketed the property. They may believe that competition among agents will work to their advantage, or may hope that a “for sale by owner” sign will give them results while avoiding a commission. These are unfortunate misconceptions. Experienced realtors will put more effort into marketing properties when the listing is secure.
Also, a seller is not bound to sell their property at the listed price.
In this environment, certain unscrupulous practices have occurred with some regularity:
- Realtors copy a listing profile from a competitor’s web site
- An individual posing as an interested buyer visits the owner, takes photographs, and then lists the property for sale without the owner’s knowledge or consent
Consequently, as you look at various real estate web sites, you may notice the same property listed more than once. It may be shown in different states of repair/disrepair, and listed at different prices (for example, if a buyer does some improvements, then re-lists the property). Many properties simply are no longer available.
Realtors may be reluctant to place a sign on a property because they feel it is more likely to give an advantage to a competitor than to stimulate legitimate inquiries from potential buyers. For the same reason, they may not wish to reveal the location of a listed property.
Another consequence of the lack of an MLS is that when the property sells, other realtors have not been notified, so they do not remove the listing from their web site. Even when they know a property has sold, realtors may be reluctant to remove the listing from their web site because the number of pages is a factor in Google search engine ratings.
Naturally, realtors prefer to show properties that they, themselves, have listed. Usually the identity of the listing agent cannot be discerned from the web listing. This makes buyers vulnerable to classic “bait and switch” practices.
A Buyer’s Agent can help buyers navigate these waters. While common in the U.S., buyer’s agents are not yet the norm in México. Until they gain acceptance, it is unlikely that sellers or realtors will agree to contribute a share toward the buyer’s agent’s commission. Even so, the additional fee could be well worthwhile for the buyer – especially one who is not fluent in Spanish.