If you are thinking about purchasing or selling a property, you need to know how to choose a real estate agent in Mexico. You will want any real estate agent who works with you to be both legal and professional. Importantly, you need to know if he/she has the knowledge and experience to assist you. The only way you will know is to ask questions and do your own investigation.
Knowledge and experience are critically important when it comes to handling your biggest asset. A recent discussion with a seller, for example, made me realize that she needed to become aware of misunderstandings that could happen if she did not fully understand Mexican immigration and tax requirements. With over two decades of real estate experience in this market, I was able to provide the information she needed and guide her through the process.
In our local Banderas Bay real estate market, both Mexican nationals and foreigners should be registered to do business and pay taxes to Hacienda, the Mexican IRS. However, there are people in our market who choose not to be registered and illegally earn income they do not report.
Selling real estate is a job that all Mexican nationals can do, regardless whether or not they have any expertise in real estate or not. A foreigner requires written permission from Mexican Immigration to sell real estate in Mexico. His/her visa should verify that he/she is legally able to work in this business activity.
If a Mexican national or foreigner is not registered with a Mexican ID or does not have a proper visa with work permit, there is a good chance they are not registered in the tax system. If their income is not reported in Mexico and they cannot give you a factura (a legal receipt for goods and services), you as a seller cannot use the expense of a commission as a deduction against your capital gains tax. These unregistered foreigners and Mexican nationals are what we call “coyotes.”
A coyote may be a neighbor who lives in Mexico part-time or is retired. He/she may expect a commission if he/she sends you or your agent a buyer. But why should the person who can’t get a referral fee in the U.S. or Canada – because he/she is not a real estate agent there – charge a fee in Mexico and pocket it without paying any tax? These people are working illegally and can be deported.
Ultimately it is your choice whether to work with this type of person, but remember: Caveat emptor, “let the buyer beware.”
Most professional real estate firms in the Bay of Banderas area are members of AMPI, which is the national association of real estate professionals in Mexico. Members follow the laws and codes of ethics and conduct to create a reliable, trustworthy and efficient real estate environment in Mexico. AMPI members are always a good choice.
Whether you are buying or selling real estate in Mexico, it pays to do your homework to find someone who operates legally and is both knowledgeable and trustworthy.
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 of Mexican real estate conduct his/her own due diligence and review.