Monday, December 10, 2007

Raising the Bar for Mexican Real Estate Representation

By Brian Flock

When purchasing real estate in any part of Mexico, it is important for buyers to know their “Bill of Rights.” Most gringos venture into the country in search of a little piece of paradise without fully understanding the rights that they have as foreigners. They hope for processes that will give them real estate protections that they are used to at home, but they often find something quite different.

In an effort to standardize buyer representation and disclosure by real estate agents, a new registry of real estate agents has been created in Baja California, Mexico, called Baja Fair Trade (www.bajafairtrade.com). The purpose of the registry is to better serve buyers and to promote real property rights by increasing transparency through a standardized disclosure database.

Baja Fair Trade agents recognize the special concerns that buyers have once they visit Baja California, with its unique processes, laws, and culture. The Registry’s focus is to help them obtain the real property rights that the buyers came to buy in the first place. The agents commit to promote properties that allow complete funds escrow and that are contractually contingent upon a clean title. They also disclose significant, known issues that may affect property values using the first such database in Baja California. Registry participants may be members of any association and must make specific disclosures to their clients in the current absence of objective federal, state, local, or association disclosure requirements.

Notably, Baja Fair Trade is the only registry of real estate agents that opens itself to public and media scrutiny. As well, buyers who feel that one of the agents on the Registry has not met the standards of the program can notify the committee via the Praise and Complaints tab on the home page.

Registry participation is open to brokers and all of the agents underneath them, or to individual agents who do not have a broker sponsor. The Registry is independent of real estate agency or association and promotes escrow, title insurance, debts that are managed as mortgages, property inspections, and professional closing services.

Any real property shown by a Baja Fair Trade agent should meet certain standards. The Baja Fair Trade agent discloses factors that may affect a buyer’s purchase decision, such as the risks associated with skipping steps, environmental hazards, property invasions, lawsuits and disputes, and other known factors that may impact property values to the buyer.

Baja Fair Trade standards prohibit certain referrals for compensation. An agent may not receive compensation for referring customers to an escrow agent, structural pest control firm, home protection company, title insurer, escrow company, or title company. The relationship of the buyer’s agent to the seller (if any) must be disclosed along with the method and amounts of the agent’s commissions.

Several tools have been established that will allow Baja Fair Trade agents to share and exchange information. Using Google Earth and Google Groups, a downloadable disclosure form will be made available to participating agents regardless of their other affiliations and will serve as a central database. The access to this information is an invaluable tool to the performance of proper disclosures to buyers.

Working with a Baja Fair Trade agent will help protect buyers and open doors to critical information once held in private.

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Brian Flock, a MexiData.info guest columnist, is a degreed and certified broker of Baja Ocean Realty in Baja California. Founder of the Baja Fair Trade registry (www.bajafairtrade.com), he may be contacted at brian@bajaoceanrealty.com, www.bajaoceanrealty.com, or (619) 793-5224.