When you purchase real estate, one of the biggest financial investments you will make, finding competence and ethics in Mexico real estate agents should be high on your list when evaluating someone to work with, whether you are buying or selling.
What is competency? It is the capability to apply or use a set of related knowledge, skills, and abilities required to successfully perform “critical work functions” or tasks in a defined work setting. It is the quality of being able to accomplish something successfully or efficiently: ability, aptitude and faculty.
In our everyday lives we seek competency from those with whom we have significant contact for completion of an expectation. But, in the words of American psychologist William Glasser, “The lowest passing grade in the real world is competence.”
We expect competence in the real estate agent we choose to represent us but how do we know this person is competent? Unfortunately, until we are deep into a transaction, we may not know if the person chosen is really competent.
Real estate is a complex industry that is not just about listing or selling a home, but it is governed by laws and practices decided upon and supported by the real estate organization in which the agent is a member.
Perhaps we only learn about competence and ethics by hearing stories from others or from our own personal experiences, which teach or remind us of some of the basic principles.
Here is a story I would like to share with you as an example:
The couple had worked with their agent at different times over a period of three years to find their ideal ‘’last home.’’ They wanted to stay in the sunny country where they had chosen to retire, but now it was important to find a condominium with an elevator, a gym and covered parking. After these basics, the couple had strong differences in likes and dislikes. One day, they walked into what they began to believe was the perfect place for them both.
An offer was made, negotiated and accepted by sellers and buyers. It included review of the legal documents of the seller and an inspection. The day after the signed agreement, the attorney for the buyers received the legal documents and began her review.
Background: The listing agent had not questioned the seller documents she received, which included a private agreement regarding a utility space. Nor did she ask the company attorney to review and comment on her file. She did not question that she needed to understand this unfamiliar document.
The buyer attorney reported to her buyers that the utility space was not part of the condo and the HOA Board could cancel its use by the current owners with a 30-day notice. In addition, the use of the space was not transferable to another party.
There was no fast solution to obtain a use-agreement. Remedies were going to take time to find and cost more money.
The buyers were rightfully upset at learning that the agreed-upon price excluded this utility room in the condo. And now they were being informed they had no assurances that they could even use the utility space. What to do?
They offered a lesser price to account for the difference in the unit and in anticipation of an added cost to remedy what had become a legal problem, but the sellers declined. The listing agent denied any misrepresentation or failure to disclose.
Here is the dilemma: The buyers could rightfully cancel the agreement because the due diligence clause gave them the right to do so, but they wanted this condo if there was any way to structure a proper way to have use of the utility space.
The sellers did not want to agree to any holdbacks or provide any solutions for a problem that had never been properly disclosed.
The easiest thing for the listing agent was to have the buyers withdraw. Then she could put the property back on the market and state there were no warranties or guarantees on the use of the utility space. This was the answer given to the buyers and their agent.
Was this listing agent competent? After learning of the problem, was this listing agent ethical in not taking the responsibility with her sellers for their ignorance of a material issue for ownership of the property? Was the broker ethical when the choice given to the buyers was to withdraw their offer and leave it at that?
This is just one example to show you the importance of finding competent and ethical real estate agents in Mexico. Your investment is too important to trust to incompetent and unethical agents.
This article is based upon legal opinions, current practices and my personal experiences in the Puerto Vallarta-Bahia de Banderas areas. I recommend that each potential buyer or seller conduct his/her own due diligence and review.