Realty Executives

Single Story For Sale in Las Palmas Resort

Realty Executives Puerto Penasco — Thu, 24 Apr 2008 04:47:00 GMT

• 2 bath, 2 bdrm single story - MLS® $294,000

Las Palmas Resort, Sonora

Property information

Uncertain about investing in Mexico, Part III

Realty Executives Puerto Penasco — Fri, 18 Apr 2008 01:06:00 GMT

C reating Certainty Investing in Mexico, Part III

Buyer and Sellers Deserve Correct Answers

Wayne Corcoran

Chief Operating Officer

Realty Executives Mexico

Member of AMPI

VP of MLS

My article, published in the April 2008 edition of the Rocky Point Times, focused on ownership and title risks. I provided a Buyer’s Checklist that buyers and real estate professionals could use to help reduce the risk, where real estate purchases are concerned. The Checklist will be updated every month with new information, as I receive additional input from real estate professionals in Puerto Peñasco. The Checklist, as well as all of my articles, can also be found on our website at www.realtyexecs-mexico.com. We want all buyers to be educated, ask the right questions, and know they are getting the right answers.

This month I am focusing on the financial risks related to your real estate purchase because, after all, it all boils down to protecting your money. In addition to being able to get proper title on your property, you also need to find the right way to safeguard your money. In addition to doing your homework to find the right property to buy, you also need to understand how, and if, your money is protected. Each purchase can have unique risks and the methods used to reduce financial risk should be chosen based on the amount of risk and / or money involved. Three key methods for financial risk management include; choosing reputable companies to work with, escrow accounts and the use of construction bonds.

Let’s start with your deposit or earnest money. Most sellers request about 5% of the property price as a deposit when you make an offer. This money tells the seller that you are a serious buyer and will most likely follow through with your commitment to purchase. Where your deposit money is held is the first risk. For short-term sales, like the resale of a house or condo, using a real estate company that follows AMPI’s (Asociacion Mexicana de Profesionales Inmobiliarios) ethical standards will help protect your deposit. Your risk is lower on a short term sale, but you need to ask if your deposit will be held in a separate earnest account. Ensure that your money is not delivered to the seller until you have rights of title of the property in your name. If you use a Notario, a reputable real estate company with licensed agents, and an escrow company, this risk can be managed.

For sales with a longer closing time, like buying a condo in a project that is under construction, your earnst money and initial deposit risk is higher and should be protected in an escrow account with the “Letter of Instruction” written to protect you (Escrow companies must distribute the money based on the letter of instruction provided by the developer, so this can vary with each escrow agreement). If you are unsure whether the letter of instruction is written to protect you, please consult with a lawyer or a trained real estate professional. If the project can be funded without your deposit money escrow accounts are a good risk reduction strategy.

Typically, for long term sales like for most developments, financing depends on sales where your funds are used for construction which greatly increases your risk. If you invest in a project where your money will be used for construction and is not fully protected in an escrow account the only true secure approach in this case is using a construction bond. For these longer-term sales you have several additional questions you need answered before you sign any contract:

- How is the project financed is a key question, will the developer disclose what percentage of the financing comes from the developer, investors, financial institutions, and buyers? From this you can see what portion of the risk the end buyer (you) has.

- If a financial institution loan is involved, ask what conditions are attached - all banks have their own conditions and terms. (eg: the bank will contribute $1 for every $3 the developer invests; or maybe they will provide the loan when sales have hit a certain percentage.) Even developers safeguard their investments and may not invest more money if sales are slow.

- If the project fails to be adequately funded are the investors left with anything real?

- Is the project far enough along to have created equity that the investors get a share of if the project fails to be completed? Generally, the further along the project is, the lower the risk of you losing your investment.

- Are there other investors ahead of you as beneficiaries (like banks)?

- So, how do you protect yourself if the developer does not meet their stated commitments?

- What if the project is delivered a year past its due date, can you get your money back or are there interest penalties?

- When a project is moving along, selling units, and bringing in cash, it’s easy for a developer to back their commitments. But what happens when the sales slow down? Can the developer still meet all of their commitments? Another good question to ask is whether or not they planned ahead for slow sales periods or if they assume sales will stay brisk?

- If the project fails completely, you need to know what the developer has to lose as you should not have more to lose than the developer or financial institutions backing the project.

Traditionally, buyers can reduce their risk and increase their protection by choosing a development that has a strong reputation for delivering on its promises. Check that the developer has built a similar size project and that the contract is written to give you recourse if commitments are not met. The only true secure approach in this case is securing a construction bond. With a construction bond the developer warranties your investment against other properties based on performance commitments. Bonds are seldom used because they are very expensive and the developer carries the entire risk making the project not profitable. But there is a way to reduce the cost of these bonds by buying smaller dollar value bonds and renewing them matching the project progress. You will need to see that the bond is written to compensate you (a project may have a bond in place that is not payable the City of Puerto Peñasco) if contract commitments are not met. It is possible for projects to get bonded which will help manage your risk. Times have changed and the developer who looks out for the buyers’ interest, and helps to reduce their risk, should be rewarded with your business.

I happen to have firsthand knowledge of bonds as I have one for the house I am building in Laguna Shores. My contractor has a performance bond, which cost just over $5,000.00 USD, and took several months to get. My bond is for one-quarter of the construction value and is renewed at each phase, which is approved by me, the owner of the development. The bond is taken out for a specified amount and if commitments and obligations are not met, I receive the difference between the work that has been completed and the bond amount. In other words, I receive compensation for the amount of work that has not been completed. When obtaining a bond, make sure that every obligation and commitment is spelled out clearly and precisely so there are no questions in the end.

If you are financing or acquiring a loan to complete the purchase of your property, take a close look at the conditions of the loan to make sure you can live with the consequence the lender builds into the contract to protect themselves. If you are getting a loan from the seller, again, make sure the contract is written to equally protect you.

Remember to match the level of financial protection with the level of risk you are exposed to. Of course I would like to see everyone go through a licensed real estate professional, but if you choose to go it alone please use the Buyer’s Checklist – it will save you a lot of headaches and get you off on the right foot. If you are currently working with a real estate agent and do not like the answers you are getting, it may be time to seek the advice of a licensed real estate professional.

Wayne Corcoran MBA PMP, is the General Manager/Broker of Realty Executives in Puerto Peñasco, Sonora, Mexico and the Chief Operating Officer for the master franchise Realty Executives Mexico. He brings over 30 years of risk based business management to the firm and can be reached at (011-52-638) 383-5856 or at their new office located in Plaza del Mision on Blvd. Fremont just past the turn off to Las Conchas.

Buyer's Checklist - May 2008 version

Realty Executives Puerto Penasco — Fri, 18 Apr 2008 01:03:00 GMT

General Questions Anwer(s)

Are ownership papers available from the owner?

Is the property in the restricted zone?

What does that mean?

Is the property part of Ejido Land?

What are the special risks?

When I get a fideicomiso (Bank Trust) do I own the

property?

Is the contract written to protect me?

Can I influence the contract?

Can I get a deed or title on the property?

Real Estate Resale Questions Answer(s)

How is the property owned?

Deed, Title, Bank Trust, Private Contract, LLC, Mexican

Corporation

Does the property have clear title?

Does the property have liens or lawsuits preventing title?
Is the property held free and clear or debt?

Are there city or state bylaws that limit ownership or usage
Is there a condo regime? What are the restrictions?

Are there HOA (Home Owners Association) rules?

How do they impact your usage?

New Development Questions Answer(s)

Is the project an idea on a brochure?

Are building and sales permits in place?

What stage of development is the project in?

Does the project clearly describe what you are getting?

Is your deposit protected in an escrow account?

Is the letter of instruction favorable to you?

Is the purchase reservation, offer to purchase, promise

of trust agreement, and other legal documents written to

protect you?

Are there warranties and consequences if the performance

expectations are not met?

How is the project financed? What percentage of the financing

comes from the developer, investors, financial institutions

buyers?

If your funds are used for promotion or construction are they

protected if commitments are not met?

If the project fails to be adequately funded, are the investors

left with anything real?

Does the developer hold performance bonds that are valid

and payable to the investor/buyer against contract warranties?

Does the developer have a good history of building similar projects?

What does the developer have to lose if the project fails?

See the blog section for the checklist

May Rocky Point Times Article - "UNCERTAIN ABOUT INVESTING IN MEXICO"

Realty Executives Puerto Penasco — Thu, 17 Apr 2008 04:40:00 GMT

The May issue focuses on financial risks and helps to ask the right questions to plan ways to protect your money you are investing. The Buyer's checklist is updated.

April Rocky Point Times Article - "UNCERTAIN ABOUT INVESTING IN MEXICO"

Realty Executives Puerto Penasco — Thu, 17 Apr 2008 04:37:00 GMT

The April issue focused on identifying the title / ownership risks and provided a Buyer's Checklist for buyers to get help answers for the risk questions.

March Rocky Point Times Article - "UNCERTAIN ABOUT IN INVESTING IN MEXICO"

Realty Executives Puerto Penasco — Thu, 17 Apr 2008 04:33:00 GMT

The March issue introduced the idea that real estate is one of the safer investments a person can make but when you are buying in a foreign country in another language you might want professional help to reduce the risks involved in making your purchase. Realty Executives is here to help you.

Uncertain about investing in Mexico, Part II

Realty Executives Puerto Penasco — Fri, 11 Apr 2008 21:40:00 GMT

We understand…and we’re here to help

Wayne Corcoran

Chief Operating Officer

Realty Executives Mexico

My article, published in the March 2008 edition of the Rocky Point Times sparked numerous conversations with fellow real estate professionals about how we can help buyers reduce their risk when it comes to purchasing real estate in a foreign country. Real estate is generally one of the safer investments you will make, but there are numerous risks involved in any purchase transaction whether you are buying previously owned properties or buying into a new development. The risks are naturally higher in foreign countries where you don’t know the laws or speak the language.

I was asked to discuss the article at our AMPI (Asociacion Mexicana de Profesionales Inmobiliarios) meeting. AMPI is the professional real estate association that frequently meets to discuss and try and solve real estate issues and concerns. I received support and input from fellow members who offered to help me come up with the Buyer’s Checklist (to your left). I have taken the questions from last month’s article, added a few more, and organized them into a chart that agents and buyers can use alike. The checklist is designed for you to copy (or cut out of the paper) and carry around with you when you decide which property or properties you are interested in purchasing. Each month the list of questions will, no doubt, be added to as I receive additional input from real estate professionals in Rocky Point. On our website, at www.realtyexecs-mexico.com, you will find the articles printed in the RPTimes in chronological order as well as the latest Checklist. We want all buyers to be educated, ask the right questions, and know they are getting the right answers.

This month’s article will focus on ownership and title risks, which seem to be the most written about topic, and one that still remains a mystery to the majority of buyers. Next month’s focus will be on financial related risks.

Let’s start with the first question on the checklist, and one that was listed last month: “Can the government take my property away?” The simple answer is no, because in 1973 a Constitutional Amendment, known as the Foreign Investment Law, allowed foreigners to purchase real estate anywhere in the country of Mexico except in the “restricted zone”. And, in 1993, the Constitution was amended again allowing foreigners to purchase real estate within the “restricted zone” by means of a Fideicomiso (Bank Trust). Foreigners can also own property in the restricted zone through a deed, not a bank trust, but a Mexican corporation must be formed…more about that later. Now, where exactly is the “restricted zone”? It is any area within 100 kilometers (64 miles) of the International Border and/or within 50 kilometers (32 miles) from the coastline. (Yes, Puerto Peñasco falls within this zone because we are on the coastline.)

The flipside to the above question (a “yes” answer) would be in cases – just as in the United States and Canada – where the Mexican Government enforces imminent domain. Southern California springs to mind when talking about imminent domain where entire neighborhoods have been demolished and residents forced to relocate to make room for more interstates.

The majority of the population believes and fears that Mexico is not as stable as Canada or the United States, but the fact is that Mexico is now in its 3^rd term of very stable government rule with foreign-owned property rights built right into their Constitution. Few people know that real estate is the major industry that underpins the Mexican economy and each President is careful to help it expand. And it is also common belief that foreigners can only “lease” land in Mexico for 50 years, but not actually own it, which is completely false.

Since you are looking to purchase property in Rocky Point, which is within “restricted zone”, I’ll start with the Fideicomiso (Bank Trust). The Fideicomiso is set up through a Mexican bank for a period of up to 50 years and can be renewed for an additional 50 years. With a bank trust in place, the buyer can lease, sell, transfer or even will the property to an heir. (In order to acquire the property, the purchaser must obtain a permit from the Ministry of Foreign Affairs. This is a permit which basically states that you are qualified in Mexico to go ahead with your purchase.) At the end of 100 years, the property can be sold and another bank trust can be established, this can also be done at any time during the 100 years to renew the 100 year time. Bank trusts, in their present form, have only been in place since 1993, so it is expected that regulations and rules will improve by the time the 100 year mark rolls around. Some even speculate that a direct deed will be issued to the owner, but that is not the law at the present time. You might be asking, “What if the property is passed down from generation to generation? Does the heir that owns the property in 100 yrs. have to sell it?” Right now, they just basically have to sell it to themselves – a formality so a new trust can be issued. Like I said, the process will most likely change many times before then.

The Fideicomiso (Bank Trust) has 3 elements to it:

1) Fideicomitente (Trustor or Settler) which may be a physical or legal Mexican National (person) who is the owner of the property to be placed in trust. (A “physical” Mexican person may be a bank that is holding the bank trust.)

2) Fiduciario (Trustee) which, by law, may be only a credit institution that holds the raw real estate. (The bank is known as the trustee and holds the deed (escritura) for the person(s) purchasing the property (beneficiaries.)

3) Fideicomisarios (Beneficiaries) who are the legal or physical foreign person(s) who are the beneficiaries of the trust and who obtain the use and benefit of the property. The beneficiary has all ownership rights to the property and may sell, lease, mortgage, or will their property as desired under the rules of the law.

I have given you the two ways foreigners can own property within the restricted zone – by having a deed or a bank trust - so why are we seeing other variations of “ownership” such as private contracts or ownership held through LLC’s?

Private Contracts were a necessary purchase vehicle until a few years ago when Fideicomiso’s (Bank Trusts) were limited to full ownership trusts – meaning that if the property was not paid in full, a bank would not issue a trust. Even though bank trusts have been issued since 1993, banks did not feel comfortable, or perhaps not had the means to carry a mortgage on property purchased by foreigners. In the past few years however, most banks have started to use “Warranty Bank Trusts”, which have a high degree of legal flexibility and can handle third party debt (carry the balance of the loan in other words).

Private Contracts were (and are) used to expedite the sale of property whereas establishing a bank trust takes longer and costs more money. With a private contract, the buyer and seller agree to establish or transfer a bank trust. The Contract transfers ownership rights from the seller to the buyer, but does not legally transfer the documented ownership in the Public Registry. Because the transfer/sale is not recorded in the Public Registry, the Capital Gains taxes are not collected. (Yes, you must pay Capital Gains and transfer taxes in Mexico.) And Capital Gains liabilities need to be calculated to ensure the buyer does not unknowingly assume this tax liability. This is a problem that plagues many transactions as some buyers and sellers are not aware that they owe Capital Gains taxes. In most cases a compromise is reached between the buyer and seller, but it is a very important issue you need to be aware of whether you are a seller or a buyer.

Private Contracts are still common practice as they save time and defer immediate costs for the buyer, but are still risky because the official title has not been legally recorded, therefore the previous owner still “officially” owns the property. In addition to being risky, the government has not been able to collect the appropriate capital gains and transfer taxes and the liability to the new owner increases over time – with or without their knowledge. The seller needs to sign off on the official bank trust documents when the buyer decides to establish one, but what if the seller is not available or is incapacitated, then what? This is a significant risk many owners currently face. This is one of many risk factors that can be solved if the seller grants Power of Attorney to a third party escrow company, OTP for example, then the seller will not have to be present to transfer ownership. Again, this is just one solution to many problems that occur when Private Contracts are used. There have been, and are, many cases where property has transferred between several owners without being registered in a bank trust. As I stated in my first article last month, you have to determine the risk level you are comfortable with and willing to take.

Now, with Warranty Bank Trusts available through the bank, Private Contracts are not required and should no longer be used. Real estate professionals should be warning their clients about the risks of using Private Contracts, and associations like AMPI, are considering discontinuing these contracts and recommending that buyers should steer clear of them. The short term savings are not worth the associated risks.

Limited Liability Corporations (LLC’s) are another way that buyers use to defer or avoid costs associated with real estate transactions. When property is held in a LLC, the sale of the LLC can be quick and easy to complete however, there is disagreement about LLC’s. In the U.S., an LLC is used to reduce liability risks and is very effective, but the legal system in Mexico is very different and the validity of LLC’s has been called into question. The disagreement where LLC’s are concerned is whether the sale of an LLC should be recorded in Mexico since the bank trust has name of the LLC registered and not the name(s) of the individual owners. However, some Notario’s (Notaries) say that, according to Mexican law, when the owners of an LLC change, the bank trust must be updated, and the sale must be recorded as a sale in Mexico. If you are buying an LLC that owns Mexican property, talk to a Notario to get the sale recorded and your bank trust updated.

The wisest and safest thing to do when purchasing property in Puerto Peñasco is to get a bank trust in your name as part of the purchase agreement. You simply cannot afford the long term risks associated with Private Contracts or the uncertainty of Mexican law where LLC’s are concerned. Besides that, you want to enjoy your time here on the Sea of Cortez, not run around from office to office and worry about whether you legally own your dream property.

After my discussion with AMPI members, and fellow real estate professionals, we thought it best that bank trusts, private contracts and LLC’s be covered first, since that is usually where most of the risk will start. Be sure to use the Checklist and contact me at Realty Executives at (602) 288-8649 if you have anything to add. If you cannot download the articles and checklist off of the internet (www.realtyexecs-mexico.com), give is a call and we’ll get you hard copies. AMPI is working to streamline the selling/purchasing process here in Rocky Point and to make sure that each and every client has the facts and full disclosure.

Next month’s article will mainly focus on financing risks, as this is another very important issue that needs to be discussed, and I will also answer more questions from the checklist if space allows.

Rocky Point Buyers Market Beckons

Realty Executives Puerto Penasco — Fri, 21 Mar 2008 21:46:00 GMT

Rocky Point Buyers Market Beckons

April Report from our AMPI President

Kent White

Realty Executives

A.M.P.I. President

In the ever cyclical world of economics we certainly see the seasons change. This is evident especially as it refers to real estate. Many people, sitting there with their glass half empty continue to refer to our stage in the cycle as the Fall or Winter. However, as we have seen by recent indicators, the excitement is here. In Rocky Point’s market, those who look past what the press from the north tells us, continue to do well. Agents and buyers alike that don’t see the doom and gloom see the potential of a shifting market. Let’s face it, as it applies to Real property there are two markets, buyer’s markets and seller’s markets. Sure we saw some hard times for awhile, this is what is called the correction period. We needed it. We had a fever during the initial boom that laid the foundation for our long term growth period. Economists still see Puerto Peñasco as one of the fastest growing, and long term growth destinations in Latin America. All of the studies done on both sides of the border by different experts on our specific market agree we are destined to be an international powerhouse. None of them said the chart would be a straight upward line. With the same logic, we should not expect to follow the same curve as the United States. We are a second home community and an investment community. Many of the baby boomers with the notion of retirement in their sight still see the need to invest, and this is a great time to invest as there are many deals to be found. Many people that have the fortitude to buy a second home are not affected by the issues that have used up so much ink in the papers lately. And some that overbought need out. Rocky Point’s resale market right now has numerous condos, houses and land listed at below their true value. This is not to say that everything is priced to sell, but with proper representation and patience, now is a great time to learn what is available and understand that there are special deals popping up everywhere.

Resort communities do not reflect the same dynamics found in markets of need.

Many of us that took the ride for several years understand the market was in its infancy, as a highly attractive resort community with beaches that hold their own against any comparable destination. In a booming economy both buyers and sellers are happy, with fresh new products unveiled monthly. Unfortunately, because the wave was so fast and furious many surfers saw the wrath of the wave’s downturn. The wave was building so fast and developers saw no reason to level out prices since the buyers kept coming. Some less rooted investors that may have gotten in late have reasons to get out. This created the buyers market that many savvy investors are taking advantage of now. The excitement is here, and deals are being made. Right now the resale market is showing huge promise, and professionals in the know are feeling the buzz.

When looking at the big picture one must only look at what Rocky Point has coming, to understand the future is just beginning. This is obvious by the time and money the officials are investing here. Janet Napolitano and Arnold Schwarzenegger and all of the other governors from the border states of the US and Mexico did not choose to meet here because it was convenient. The Coastal Highway and the Airport are soon to be a reality. The Municipality is paving more roads than ever before. The Marriott Hotel group has introduced The Peñasco Bay Towers, a 28 story 265 room four diamond hotel. This alone would certainly add to the international attention.

Recently, Sonora authorities and Federal authorities met with the decision makers of several cruise lines, including Carnival and Holland America to fine tune the plan for future cruise lines to include Puerto Penasco in their itinerary. Epifanio Salido Pavlovich introduced the proposed Cruise ship route through the Sea of Cortez, which includes the creation of a terminal in Puerto Peñasco.

"Soon we will have the visit from the delegation and the Florida Caribbean Cruise Association for Puerto Peñasco to revise the draft as Home Port and Guaymas to see the progress of infrastructure that is taking place at this time, as well as tours yet to be defined, and training for health care providers in the locality," he explained.

With all of this and so much more, we will be a preferred destination for tourists and investors alike for many years to come. The Spring is here, and we are still in our infancy. This market will not be crashing anytime soon. In fact economies not scared by the media have continued to look for investments in this paradise some of us call home. Canadians and many Mexicans from around the country as well as those living in the US are looking this way for the bargains. It is important for investors to find reputable representation that will educate them through the research stage as there is a wide variety of options; Good and bad. In a time considered to be a buyers market there is a surplus of inventory. The available condos, homes and land are so diverse that you need a seasoned representative. There are plenty of agents in this town with credentials you can trust. If an agent is an AMPI member, for example, he or she is a state recognized, licensed agent. The most important thing that a buyer or seller gets with an AMPI affiliated agent is accountability. This accountability will make the difference between you looking back and knowing you found one of those bargains, or one of the many less than adequate outcomes that happen to would be investors everywhere. It would be irresponsible to stress that if one doesn’t jump now they’ll miss the buyers market. But it could also be wrong to think that this market is going to keep sliding for a long time. Even in the US market of today savvy investors are currently buying, hence the term buyers market.

Uncertain about investing in Mexico?

Realty Executives Puerto Penasco — Fri, 21 Mar 2008 21:32:00 GMT

Uncertain about investing in Mexico?

We understand…and we’re here to help

Wayne Corcoran

Chief Operating Officer

Realty Executives Mexico

Real Estate is generally one of the safer investments you will make because it is scarce by nature: There is only so much land on this earth - no more can be generated. There are a number of reasons for wanting to own real estate; maybe a second home, a vacation get-away, a legacy to leave to your children, or just as an investment banking on the area’s growth potential. Buyers have safely purchased property in Puerto Peñasco, Sonora, Mexico for many years. They’re hooked once their toes hit the sandy beaches and they are gazing upon the blue Sea of Cortez. Whatever your reason, and wherever you buy, there are things you need to do to make sure your investment will be sound. The whole process becomes more complicated when you invest in a foreign country where you don’t know the laws or speak the language. Where do you go? Who do you trust? How do you know if you’re getting straight answers? These are a few of the things Realty Executives licensed agents would like to help you with. We want all buyers to be educated, ask the right questions, get the right answers and know that they are getting the right answers.

From year to year, or month to month, real estate goes through a natural cycle, which can favor the buyer or the seller. Obviously buyer’s fair better when buying in a “Buyers Market” and the sellers in a “Sellers Market”. Understanding the ups and downs of the real estate market, and the risk involved in your particular purchase, is only the beginning of understanding the risks involved in real estate transactions. First of all you have to know that all real estate purchases are not of equal risk – just like investing in the stock market – and that each of us have different tolerances for risk and different expectations. Do you take a chance on a start-up venture that has just gone public or do you stick with blue chip stocks that have a strong performance record? Do you purchase a condo in a development that has only laid the foundation or do you purchase in a project that has already been completed? Are you speculating that the area will see considerable growth? Do you want to be the first one to own something special? Or do you have other reasons for investing? How do you assess risk and decide if your investment will fall within your comfort level? These are just a few of the questions your licensed real estate agent should be asking you.

So, how do you ensure that your potential investment will be a sound one? How do you go about finding out if the answers you are given are indeed factual. Though some make purchases on their own, the majority put their trust in a real estate agent. Is your agent licensed? Are they providing you accurate answers? How do you know? How do you know what questions to ask? And how do you go about doing your own research? Again, these are a few of the questions we will be addressing in the next few months.

If you are considering purchasing land in Puerto Peñasco, here are a few questions you should be asking your real estate professional, wether the property is completed or in some stage of construction:

Is the property just an idea on a fancy brochure?

Does it have clear title?

Are there any liens or lawsuits against any part of the property?

Is there money owed on the property?

Are there rules that limit ownership?

Can the government take it away?

Is this property in the restricted zone and what does that mean?

Can I get a deed or title on this property?

When I get a Bank Trust, am I owning the property or leasing it?

Does Ejido land bring any special risks?

Is there a condo regime?

Are there HOA rules that impact your needs?

Is the real estate property under some stage of development?

Is the development clearly described so you know what you are getting?

Does the developer have all the permits in place including the permit to sell?

Is your deposit protected with an escrow account and is the escrow letter of instruction favorable to you?

Is the reservation, offer to purchase, and bank trust documents written to protect you? Are there warranties and consequences if the performance to deliver on time, and with the right quality, are not met?

Do you know how the project is financed? What percentage of the financing comes from the developer, a financial institute, investors or buyers? If your funds are needed for promotion or construction are they protected if commitments are not met? If the project fails to be adequately funded are the investors left with anything real?

Does the developer hold a performance bond and is it valid and payable? Are there performance clauses in the sales contract warranted against the bond or other real property?

Does the developer have a good history of building similar projects? What does the developer have to lose if then project fails?

These are just a few of the questions that will get you started on the right path for a safe and sound investment. If you get these questions answered, you lower your risk. If you are not getting good answers from your agent or the developer then you may want to switch to someone that can help you get these answers. Real estate investments are some of the safest and most exciting investments you will make in your lifetime. You can buy in a perceived “risky” market if you get full disclosure and the results match your tolerance to risk. While most of us want to make sure our investment is rock solid, others do not mind taking a chance where the potential return will be much greater. This is just one of the things that you and your licensed real estate agent need to address.

Next month we will start with the above questions and tell you how to be sure you are getting the proper answers, have been given the correct documentation and how best to protect yourself if you purchase real estate in Puerto Peñasco, Sonora, Mexico.

Wayne Corcoran MBA PMP, is the General Manager / Broker of Realty Executives in Puerto Peñasco and the Chief Operating Officer for the master franchise Realty Executives Mexico. He brings over 30 years of risk based business management to the firm and can be reached at (011-52-638-383-5856) or at their new office located in Plaza del Mision on Blvd. Fremont.

MEXICO IS WATCHING PUERTO PENASCO REAL ESTATE

Isabel Saborith — Mon, 10 Mar 2008 15:46:00 GMT

March report from our AMPI President

In Mexico City I recently had the opportunity to meet with AMPI presidents from around the country. There were approximately 500 representatives in attendance at this convention and swearing in ceremony for association presidents. It was apparent that all of Mexico's real estate professionals are paying attention to Sonora and specifically Puerto Penascos' successes. Each state soon will be working to follow suit with the licensing process Sonora has mandated for all agents. Everyone I listened to commented that the efforts we are pioneering are inspiring officials throughout Mexico, because with licensing, we will be able to enforce accountability. We are gaining huge momentum not only in the respect from Mexico's federal government but throughout the international real estate world because of our commitment to higher standards and accountability. AMPI national is very interested in learning from what we are doing.

We have established a Sonora Committee of AMPI presidents that has begun to research the possibilities of creating a pool of AMPI certified instructors that can help us with continual education in order maintain the highest of standards. We agreed to create a committee within AMPI where agents representing coastal cities, can discuss issues relative to their specific needs, such as Federal Zone issues and Fiedecomisos.

In Hermosillo, AMPI presidents from Sonora recently met and shared some great ideas. We will continue working together because the licensing process affects all of us. We discussed how we can together make it as beneficial as possible. It was agreed upon that the enforcement part of the process needed to be addressed as soon as possible and that AMPI should assist the state with mandates of compliance as well as the obligation only work with those complying with the law. Leaders from Hermosillo, San Carlos, Guaymas, and Puerto Penasco all then met with the Secretary of Economy of Sonora and had an inspiring dialogue. We were invited to share our concerns with Lic. Rodolfo Elias Calles, Sonora's representative in charge of the Real Estate licensing process. I enjoyed this meeting because he listened, he cared and he respects our experience and welcomes our assistance in the betterment of our profession which helps us protect our buyers and sellers. We all left the meeting certain that we were on the right path, and that together we really can make a difference.

Licensing is a giant step towards maintainable ethical standards. The diplomado course is the educational arm of the process. This state sponsored course is intended to provide actual and current technical and administrative skills to participants allowing them to improve their performance in real estate activities. It analyzes the legislation of both the federal and state judicial dispositions regarding Real Estate property, as well as covers issues pertaining to taxation, city development, appraisals, trusts, sales strategies, and ethics in the real estate field. The instructors are all national leaders in their respective professions, and came from all over Mexico. This class has forced 40 agents at a time to sit in a classroom for 109 hours and grow together. It has created such a unity among the agents that a movement started to align two real estate associations in Rocky Point. As of today we have had many meetings with the leaders of both groups. Our efforts have changed from better ways of working together to actually starting the process of becoming one organization. I believe this synergy was advanced by the friendships started within the diplomado classes.

The two real estate associations that exist in Rocky Point are both based on the values of high ethical standards and accountability. However, if two associations have similar agendas yet do not communicate properly, they are not working as effectively as they can. AMPI is Mexico's National Association of Realtors and PPREA (Puerto Peñasco Real Estate Association) is an association of local professionals. We each have our own "Multiple Listing Services", like systems, and we both understand the need for one source of information to better serve our clients. Both have done well in their quests. However, it is understood by all, that the need for one association is best for members and the real estate community as a whole. Together we can make a difference.

It is our position that any person who receives income based on commissions from sales of real property should be held liable for their actions under the law as it is applied to licensing and the standards that we represent. A realtor is one who has been approved by the National Association of Realtors. (Now International Association of Realtors) AMPI members are allowed to call themselves Realtors, which is a protected brand, not thrown around loosely. Our members will only work with other professionals in compliance with the laws of Sonora. The value to a buyer and seller is in the accountability factor.

Kent White

Realty Executives

A.M.P.I. President

Price Reduced on Marcelo Pino y Aquiles de Serdan, Col. Oriente in Col. Oriente

Realty Executives Puerto Penasco — Fri, 22 Feb 2008 19:09:00 GMT

Col. Oriente, Puerto Penasco In Town - Announcing a price reduction on Marcelo Pino y Aquiles de Serdan, Col. Oriente, a 385 sq. m., 1 bath, 2 bdrm townhouse. Now MLS® $50,000 - Priced to Sell.

Property information

Price Reduced on Marcelo Pino y Aquiles de Serdan, Col. Oriente in Col. Oriente

Isabel Saborith — Fri, 22 Feb 2008 18:10:00 GMT

Property information

Single Story For Sale in Las Conchas

Realty Executives Puerto Penasco — Sun, 17 Feb 2008 04:19:00 GMT

Best Rental unit in Puerto Penasco

• 1,300 sq. ft., 2 bath, 2 bdrm single story - MLS® $450,000 - Best buy Puerto Penasco

Las Conchas, Eastern Beaches - Not only can you get a great return on your investment but you can enjoy the unit yourself.

This 2 bedroom, 2 bath condo is located beachfront in Las Conchas, just past the CEDO. Each bedroom has a queen size bed, and the master bedroom has a bath of its own. There is also a sleeper sofa in the living room which has ample seating. The living room comes with an entertaiment center with TV/VCR and DVD player. The kitchen is fully equipped with a stove, microwave, fridge, coffeemaker, blender, and all necessary kitchen utensils. Or you can cook on the charcoal grill on the patio. The condo has a large pair of sliding glass doors that open out onto the beach front patio, you are only a few short steps away from the beach and the water.

Property information

Single Story For Sale in In Town

Realty Executives Puerto Penasco — Thu, 17 Jan 2008 19:02:00 GMT

• 102 sq. m., 3 bath, 2 bdrm single story - $230,000 - CASH OR 50% DOWN & TERMS

In Town, Puerto Penasco/Rocky Point

Property information

Single Story For Sale in Santo Tomás

Realty Executives Puerto Penasco — Thu, 10 Jan 2008 23:00:00 GMT

• 17,304 sq. ft. single story - MLS® $147,500

Santo Tomás, Sonora - Lot 83 has AMAZING OCEAN VIEWS!! It is located in ROW 2 across the road from a beach access which has unobstructed views down this low-lying corridor. There is also a natural reserve behind this lot, therefore building will not be done in back of this property. This lot also allows for a two-story home. It has drinkable water, electricity and clean transferable title.

Property information