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The fideicomiso can be established for a maximum term of 50 years, renewable. The buyer requests the Mexican bank to act as a trustee on his behalf. A permit is required from the Ministry of Foreign Affairs to allow the foreigner to acquire the specific property described. The buyer acquires all the benefits of a direct owner, including the ability to lease, or transfer the right of the property to a third party or pre-appointed beneficiary or heir. The trustee bank does not hold a fideicomiso as an asset of the bank.
The fiduciary of a fidecomiso is the Mexican bank who is responsible to the
buyer/beneficiary to abide by Mexican law to protect the interest of the buyer/beneficiary. A fiduciary takes legal responsibly for another person.
The real estate agent you choose to work with has a responsibility to represent you in a transaction. You need to ask the agent about his/her experience, credentials to be in business, how he works, and what he understands to be his role in working with you. You need to ask questions. You are investing a large sum of money, regardless of the sales price. You are entrusting a person/company with your financial and psychological well-being. This company/agent should take this responsibility very seriously. You need to determine that this is the case and that the agent/com\'e1ny has the experience and depth of knowledge to represent you well. If you are working with a new agent, you need to know who will work with him to make sure you are given professional, experienced representation.
On August 2, 1995 the Diario de la Federacion, official publication of the federal government, published an agreement, by which the general guidelines are set for the creation of a Normalization and Competency Certification process for laborers in Mexico. In this agreement the coordinating agency is Consejo d e Normalizacion y Certificacion de Competencia Laboral
(CONOCER).
This agreement requires the Certification of the Professional de Commercialization De Bienes Inmuebles, as proposed by AMPI National and published on Jan 15, 2002. There is a national requirement for any person who is selling or leasing real estate to become
licensed. AMPI National has the responsibility to require their members to be tested. 3 national testing centers are being established in Mexico City, Guadalajara and Monterrey.
Members of AMPI (Mexican Association of Real Estate Professionals) have a formal set of rules to follow which include the structure of their organization and a code of ethics to follow in dealing with the public. The current statues were approved in November, 2000. The AMPI Vallarta chapter has established guidelines in addition to the national ones. Ask your prospective agent to explain the Rules of Ethics for real estate
practitioners. Discuss these rules as part of your interview process.
Mexican law, in relation to real estate, is a part of the general body of civil and criminal law. The enforcement of these laws is subject to the judicial process in Mexico, whereby a judge not a jury, renders a decision. Real estate agents will be under the supervision of
Conocer.
Buyer agency is a recently recognized specialty in real estate in Mexico. A
buyer's agent represents one party, the buyer. The buyer agent does not represent the seller or act as an agent for both parties at the same time. The buyer agent is to obtain for their client (buyer) the best price and terms for the property which his client wishes to purchase. The buyer agent is to keep in confidence personal information of the buyer and to negotiate on the
buyer's behalf. The buyer agent, however, within the AMPI code of ethics, is not to withhold information that will harm the seller. The buyer agent can be paid a commission from the marketing fee that the seller has established with the listing agent. In some cases, the buyer pays the buyer agent his fee directly. Buyers may also hire and pay buyer agents to represent them when a property is for sale by owner.
A dual agent negotiates for both parties: buyer and seller. This is a most difficult role for one agent to take. Confidentiality for both parties should be strictly followed. There are questions whether an agent can successfully negotiate for both parties at the same time without there being a detriment to one side or the other. The most practical way to allow one agent to work with both principals is to have the buyer and seller agree on what they want and allow the agent to implement their decisions. The agent should disclose to both buyer and seller in the beginning, if he is acting in this dual capacity. The buyer and/or seller can decide what type of
representation they want and they can select their own representative.
A listing agent takes on the responsibility to represent the seller and market his/her property. The listing agent should work to obtain the best price and terms for his client (seller). If the listing agent is a member of AMPI, he agrees to cooperate with other AMPI members in working together to effect a sale. The listing agent shares his fee with the selling agency. If the property is listed in the Multiple listing service, the percentage of commission of the sales price to be paid to the cooperating agency (selling agency) is made available in advance.
An exclusive listing in Mexico is similar to an exclusive listing in the USA. The seller gives the listing agent the exclusive right to market his property. The seller does not sign multiple listing contracts, but authorizes one agent/office to represent him for a period of time. The seller has agreed to compensate the exclusive agent when a sale is accomplished.
A non-exclusive listing is one in which the seller makes known his desire to sell, but he has not chosen exclusive representation. The offer is brought directly to the seller. If you are interviewing an agency/agent to list your property, ask them what the guidelines are for listing property in the AMPI Code of Ethics. Ask what the company policy is for listing property and what the marketing plan includes. Ask the prospective listing agent how he plans to receive and present offers to you.
Conflict of interest can be avoided if there is full disclosure to all parties in the beginning of the relationship. Full disclosure of prior and current relationships and information that is important to the transaction, should be disclosed by the seller, buyer, agent, and anyone that is a party to the transaction.
Spanish is the official legal language of Mexico. For an agreement to be enforceable under the Mexican law, it needs to be written, signed and witnessed in the Spanish language. An English translation is a courtesy translation. The quality of the English translation can vary. The more you can read and write the Spanish language, the more you are in control of information. You are subject to manipulation by others when you are not knowledgeable of the language in which the business is conducted.
Don't get hung up on tweaking the English to the point of neglecting the importance of the Spanish.
Financing: The majority of purchases of single residential properties are for cash. Interest rates have not been competitive enough in the past to attract foreigner purchasers into taking out a mortgage. There are some lenders in Mexico and some in the USA who will provide mortgages on Mexican real estate. You will need to find out the individual underwriting or loan requirements.
When a sale is done is without a mortgage lender, a survey, market appraisal, inspection, escrow account, or title insurance is not a requirement of the transaction. The buyer needs to decide in advance of the written offer, what they want to do in regard to all these issues. These items have to be brought up in the written contract if they are to become a condition of the
offer.
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