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From YourSITE.com Real Estate
What can real estate clients expect from their agents? It's a good question, especially when buying or selling real estate in Mexico, where the industry is in its infancy, and regulation is still minimal. Mexico has a long tradition of buying and selling property, based largely on situations in which principals knew each other because their families had lived in the same community for several generations. If a seller had a good reputation, a buyer had no hesitancy in dealing with him or her, knowing that this was a person belonging to a family with integrity. Puerto Peñasco used to operate this way. But as Mexican society became more mobile, problems arose. Outsiders moved in. They and their families were unknown entities. Could they be trusted? When a large number of foreigners entered this picture, it changed the situation even more dramatically. Now Mexican sellers not only did not know American and Canadian buyers, but they did not know the system the foreigners were used to. Foreign buyers did not know the Mexicans or the real estate agents representing them, who were often fellow Americans. Sadly, abuses occurred. Americans learned that an agent who was also an American was not necessarily trustworthy on that account. Additionally, since both Mexicans and foreigners were dealing with a system different from the one they knew, misunderstandings often occurrred, even without the intention to mislead or defraud. How can buyers and sellers be educated and protected? To answer that question, we looked at several different sources that specify what the agency relationship entails, in other words, what clients have a right to expect from real estate agents. According to the Arizona Association of REALTORS® contract, agents owe their clients the following duties:
Loyalty means putting the client's interests first. Obedience means following the client's instructions. Confidentiality means not disclosing personal or financial information about the client. At the same time, agents have an obligation to disclose any information about the property that might affect the sale. Accountability means reporting frequently to the client on the progress of the transaction. Lack of accountability is the major complaint about real estate agents that we hear from clients--on both sides of the border. The Asociación Mexicana de Profesionales Inmobiliarios (AMPI), which is the Mexican equivalent of the National Association of REALTORS® in the U.S., lists the following duties of agents:
The AMPI list includes all 5 items on the AAR list, but adds Protection of client's interests, Cooperation with all, No net listings, Authorization to advertise, and Presentation of all offers. Probably all of these could be considered as aspects of Loyalty, but they include some specifics that suggest possible violations. In most of Mexico, Multiple Listing Services are non-existent, and so cooperation has been difficult. Now, in Puerto Peñasco we do have an MLS, and cooperation is becoming the rule, rather than the exception. A net listing, for those who don't know, is one in which a seller says to an agent, "Get $_____ for me, and you can keep anything over that for yourself." Such a listing is illegal in Arizona, presumably because it doesn't protect the client's interests. (It may not protect the agent's interests either, if the sale amount is too small to cover a reasonable commission.) Authorization to advertise addresses the problem of agents putting up signs on properties without having a signed listing or even, in some cases, an oral agreement. Presentation of all offers discourages the practice of holding back offers that an agent may not consider worth presenting. It should be up to the client to decide, so an agent who does this is violating the obligation to protect a client's interests. The Arizona-Mexico Commission has a task force on buying and selling real estate, whose mission is to help protect buyers and sellers from unscrupulous practices in the real estate industry. The Commission tells clients to expect the following from their agents: Place payments in escrow account Facilitate title insurance Don’t release funds until title transfer Follow buyer’s instructions on purchase contract Give buyer estimate of closing costs Confidentiality Accountability Assist buyer with all negotiations Provide frequent progress reports Make purchase contingent on final due diligence review Include personal and professional inspection Recommend consultation with experts (e.g., lawyers, engineers, architects) The Commission's recommendations address some very specific concerns that have been caused in the past by different legal systems and different expectations. Place payments in escrow account, Facilitate title insurance, and Don't release funds until title transfer are responses to the fact that escrow, as we know it in the U.S., and title insurance are largely unknown in Mexico, and so it has often been the practice for buyers to give down payments directly to sellers or sellers' agents. Follow buyer's instructions on purchase contract is another way of saying Obedience. Give buyer estimate of closing costs, Assist buyer with all negotiations, and Provide frequent progress reports are all part of Accountability. Make purchase contingent on final due diligence review, Include personal and professional inspection, and Recommend consultation with experts are surely part of an agent's duty of protecting a client's interests, or Loyalty. The Commission's recommendation is part of an effort to help the real estate industry in Mexico adapt to changing situations and changing demands. A real estate broker we worked with in Tucson perhaps expressed it best. He always said to his agents, "Don't be a problem-maker; be a problem-solver." Our advice to buyers and sellers is to find yourself an agent in Mexico who will solve problems for you, not create them. John and Margaret Fleming have been licensed to sell real estate in Arizona since 1978. They are co-owners of Counselor Realty in Tucson, and Counselor Real Estate Seminars, a school certified by the Arizona Department of Real Estate to offer pre-licensing and license renewal courses for agents. They are also co-owners of El Gato Negro Real Estate in Puerto Peñasco. © Copyright 2001 by YourSITE.com |