BY PEDRO BENITEZ-CRESPO
Buying a house is a dream most people share. For many that have achieved the lower and medium stages in Maslow’s hierarchy of needs pyramid, buying a second home is almost a given. And for many ex-pats living in Cabo, buying a property seals their status as locals. In spite of it and because of it, one wants to do it in a safe, professional and orderly fashion.
It is understandable that acquiring a house in a foreign country can be quite difficult. Moreover, when there are several barriers of entry that make it tougher, such as bargaining with realtors in a different language, signing contracts with another underlying legal system – Common Law versus Roman Law, and even dealing with incompatible measuring systems (Metric vs Imperial systems)!
For instance, in the United States and Canada, people are used to escrow accounts, every time they carry out a sales agreement, which can help them plan for house-related payments and make sure one has the money set aside for, them to avoid worrying about it in the future. In real estate, escrow is typically used for two reasons: to protect the buyer’s good faith deposit so the money goes to the right party according to the conditions of the sale; and secondly, to hold the homeowner’s funds for property taxes and homeowners’ insurance.
In Mexico, this is something rarely utilized. So foreigners doing transactions in the Baja California Sur area tend to seek other solutions, like the use of Mexican trusts, also known as fideicomisos.
Other mechanisms used are third-party escrows – for example TLA Escrow Services (out of Dallas, Texas), or Global Escrow Solutions (out of Austin, Texas). This takes place typically for cash transactions. There are also some lending options in US dollars for foreigners, like some Mexican banks lately targeting American and Canadian buyers, with all-in rates ranging from 6% per year, all the way up to 10% annually, with 50% down payments.
So it is in these situations where certainty is of the essence, that the Norma Oficial Mexicana (Mexican Official Norm) – NOM-247-SE-2021, enforced by PROFECO, the Federal Consumer Agency for its acronym in Spanish, comes in handy. This relatively new rule, established two years ago, seeks to provide protection against real estate fraud. Through this law, buyers are protected while they are in the process of buying a house or apartment. Leveraged on NOM-247 as well as many other tools and certifications, is how Harry Schikora advises the people he works with as he is a member of the PROFECO State Advisory Committee for Baja California Sur.
Harry is a guy you want to have on your contact list. Why? Previously active in sales on both sides of the border, he is a member of both the Los Cabos Multiple Listing Services (MLS BCS & OMNI MLS) and President of the Los Cabos Board of Realtors, known as AMPI – Mexican Association of Professional Realtors for its acronym in Spanish.
Formerly an associate broker that was licensed in Alaska, he was the KW Luxury Team Leader at Keller Williams Cabo Paradise here in Los Cabos. His expertise in the field has led him to get both the LUXE (Luxury Listing Specialist) and the CLHMS (Certified Luxury Home Marketing Specialist) from the Luxury Home Marketing Institute. He has also been recognized by the ABR – Accredited Buyer’s Representative from NAR, which is a designation for real estate buyer’s agents who focus on working directly with buyer clients at every stage of the home-buying process.
Last but not least, he is also authorized by the National Association of Realtors – a professional international affiliation, for members cooperating outside the U.S., through a bilateral agreement with AMPI, with more than 1.5 million members worldwide.
These tools ensure a common ground for ethics, ongoing specialized information programs and updates on the issues and trends facing home buyers, as well as continuous education and a high professional standard where any given realtor is obliged to disclose everything he or she knows about any given property. This makes it safer for people to purchase a house since their investments are going to be protected, both because of the instrument used and the due diligence done by all and every organization mentioned in this article thus far.
Please remember always to be well advised before you buy or sell a property. It is better to be safe than sorry.