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Thursday, November 20, 2008

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Thursday, November 20, 2008

The Importance of an Exclusive Buyer's Agent in Mexico   by Jim Scherrer

As we all approach retirement, we often dream of someday owning a piece of Paradise, somewhere in Florida, Arizona, Hawaii, or even Puerto Vallarta; someplace with a climate conducive to kicking back and enjoying life to its fullest, year round.

To more than 50,000 retirees, Puerto Vallarta, located on the Mexican Riviera along the Pacific Ocean at the same latitude as Hawaii but six hours closer and with a lower cost of living, has been selected as their primary or part time retirement destination. Unlike the arid zones of Arizona, magnificent ocean views are available everywhere in Vallarta. Unlike the flat land and low elevations throughout Florida, the Sierra Madres provide the back drop to all of the Vallarta area providing a beautiful array of tropical flora and fauna.

The city of Puerto Vallarta lies on the innermost part of the 25 mile diameter Banderas Bay. The total land perimeter of the bay is approximately 60 miles, however only about 40 miles of shoreline is available for foreign ownership. This available land extends from Mismaloya, 10 miles south of Vallarta, to 25 miles north of Vallarta near Punta Mita in the state of Nayarit. An additional stretch of Pacific Ocean shoreline extends about 15 miles north of Punta Mita with certain portions available for foreign ownership, thus providing the total Greater Puerto Vallarta area roughly 55 miles of beachfront property.

With Greater Vallarta´s large area of magnificent land, its climate similar to that of Hawaii, and a pro-growth Mexican government with many new investment incentives, the area has virtually exploded with new residential construction and consequently, with new real estate agencies. Aside from re-sales, these listing agencies are currently marketing in excess of 100 new condominium complexes containing more than 7,000 new condominiums under various phases of construction. An additional 20,000 condominiums are in the conceptual or planning stages and are scheduled for construction during the next 15 years.

In order to promote these properties, there are currently over 80 listing agencies serving the area with approximately 500 agents, all having a fiduciary duty to the developers and property sellers. That being said, in order to avoid a conflict of interest, they must pay their dedication and loyalty to those with whom they have contractual agreements and represent; the developers and sellers. Of course, these agents will do everything within their power to sell one of their own listings first, prior to considering the listings of others, in order to satisfy their clients as well as double their own commissions.

Now that we have established that the area in and around Paradise is huge, the quantity of new villas and condos is overwhelming, and 500 listing agents are putting forth their best effort to please their clients, the sellers; certain questions arise. How in the world do visitors to the area go about locating their retirement destination without searching through 80 agencies? What assurances do the prospective buyers have that they are getting exactly what they want, in the location that best suits their objectives, and at the best price available? How, in Mexico where all legal contracts are in Spanish and the laws are somewhat different, can the prospective buyers be assured that they are being treated fairly when the listing agent is representing the developer or seller?

To answer those questions and for numerous other reasons, the use of a buyer's agent is a prerequisite for any foreigner considering the purchase of real estate in Puerto Vallarta. There are a few agencies in the Greater Vallarta area that claim to be buyer's representatives; however most of them also have listings within their agencies. In order for prospective buyers to be absolutely confident that they are receiving 100% loyalty and dedication, they should attempt to employ the services of an agency with absolutely no listings, no biases, and no ulterior motives; one who knows the area well, that has access to all listings, and that has the legal team, property inspectors, appraisers, mortgage bankers, escrow agents, etc. working on the buyer's behalf.

Agents that exclusively represent buyers are quite common in the US and Canada, however they are few and far between in Mexico. Such agents do request signed contracts with the buyers stating that they are acting on the buyer's behalf, however there is generally no charge to the buyer since commissions are shared by the listing agent.

Listed below are some of the benefits associated with using an Exclusive Buyer's Agent in Mexico:

•EBA Represents no sellers and has no listings •EBA Avoids dual agency and conflicts of interest •EBA Owes complete fiduciary duty and loyalty to buyer •EBA Maintains buyer information as strictly confidential •EBA Has access to all properties on the market •EBA Is unbiased in showing all properties available •EBA Conducts an objective comparative market analysis •EBA Thoroughly researches property pros and cons •EBA Obtains appropriate inspection reports and appraisals •EBA Strives ethically to gain bargaining advantage for buyer •EBA Negotiates for buyer to optimize purchase agreement •EBA Obtains most favorable legal and financial professionals •EBA Prepares contracts in Spanish with accurate English translations •EBA Works with 100% buyer dedication throughout entire process •EBA Charges the buyer no fees for representation services •EBA Often saves the buyer time, money, and provides peace of mind

In summarizing, the prudent buyer will always locate and use an Exclusive Buyer's Agent when searching for his/her retirement residence in Mexico; where caveat emptor, or buyer beware, is the rule to follow. In so doing, the retiree will be assured a stress free and enjoyable first retirement experience in Paradise.

Source:

For additional articles by Jim Scherrer pertaining to Retirement in Puerto Vallarta, please go to Puerto Vallarta Real Estate Buyers‘Agents and click on ARTICLES.

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