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There Are Two Objectives for Every Home Sale in Mexico

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The south coast of Puerto Vallarta, Mexico
Credit: Harriet Murray

There are two objectives for every home sale in Mexico: Every home seller’s dream is to close the sale quickly and get a final price that’s at least as high as the asking price. However, a home buyer wants to negotiate the figure down as far below the asking price as possible.

For example, a seller wants a sale-to-asking price ratio of something like 120 percent, while a buyer would prefer a ratio that’s closer to 80 percent. Exactly where the two parties meet on that spectrum depends on many variables, the biggest being overall market conditions. There are both good and bad scenarios.

Good

MLS data used correctly can influence this Yin and Yang stress between buyer and seller in negotiation. A multiple listing service is a suite of services that real estate brokers use to establish contractual offers of compensation. And importantly for the public, to accumulate and disseminate data to show market
prices.

Bad

One of the most common lawsuits brought against real estate agents is for breach of duty. Any breach of this duty, whether from negligence or intentional action, is subject to the risk of a lawsuit.

Negligent misrepresentation occurs when someone makes a statement without regard to the true facts.  Negligent misrepresentation is when a person does not lie directly but makes a statement about a subject with no reason to believe it to be fact.

Real estate agents are frequent targets for lawsuits. A common lawsuit scenario involves a buyer of property suing the seller and the seller’s agent for failure to disclose defects in the property. In some cases, the buyer also sues his or her own agent to the transaction.

The Lie: “Now is a great time to buy.”

Agents try to get their clients to make offers on homes by talking about how good the market is for buyers. This line or lie is used to win over new clients or to encourage sales of properties that the agent has listed.

How does the difference between high and low context affect negotiating a real estate purchase? Buyers and sellers from different cultures will have to be aware of this difference in approaches when one is a high-context country buyer purchasing from a low-context country seller.

Mexico is generally considered to be a high-context culture. This means human connections have developed over years of interaction and a shared understanding of expectations. In high-context cultures like Mexico, a foreigner from a low-context country will need patience and persistence to recognize and understand these established relationships.

Low-context cultures tend to be logical, analytical, action-oriented, and concerned with the individual. High-context cultures, such as Mexico, Japan, China and Saudi Arabia, already understand much of the background information before they start a negotiation.

Low-context refers to societies where people tend to have many connections but of shorter duration for some specific reason. In these societies, cultural behavior and beliefs may need to be spelled out explicitly so that those coming into the cultural
environment know how to behave.

In a low-context culture, communication occurs through explicitly spelled out and defined words. Listeners must interpret spoken or written words as they are. Germany, Sweden and the United States are generally classified as low-context cultures.

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.

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