Life in Mérida

February 4, 2024 Newsletter

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The REALITY of real estate . . .

Real estate transactions in Mexico are carried out very differently than in other countries. It’s important to know there is no oversight or regulatory committee to oversee real estate transactions. This means anyone and everyone can sell real estate. Real estate agents are not required to have any type of licensing.

“Only 10% of the people who offer real estate services in Yucatan have the capacity, training, professionalism, certification, and recognition to advise the public on real estate investment,” said Enrique Trava Griffin, 2023/2024 local president of the Mexican Association of Real Estate Professionals (AMPI). According to Trava Griffin, 174 AMPI-certified real estate companies have about 550 professionals practicing in the real estate sector. In contrast, over 5,000 people offer various real estate services without fiscal accreditation.

Creating relationships with people you trust . . .

Since January 20th, Angel has taken out 12 clients over 6 days to show real estate - both renting and buying - logging approximately 321 miles. He's shown in Centro, Caucel, Montes de Ame, Chelem, Telchac Puerto, Progreso, Chuburna, Cabo Norte, Temozon Norte, and Cholul.

I was with him during the showings to answer any questions about buying or renting in the U.S. vs. buying or renting in MÉRIDA. I want to share some of the information discussed to give a better frame of reference to the ENORMOUS differences in real estate between here and the U.S.

Exclusivity - exclusive listings are NOT common here. Maybe only 5 - 10% of the listings (rentals and sales) are exclusive. What does this mean? The same house can be listed for sale or for rent by multiple agents at different prices.
No Regulation - no laws or regulations exist for who can be a real estate agent. Anyone and everyone can represent buyers, sellers, landlords, and renters.
Education/Training - as stated above, only 10% of people have undergone training, certification, and have the professionalism to represent buyers, sellers, and renters.
Multiple Listing System - while there is an MLS of sorts called Easy Broker, MANY people do not list properties on this site and list instead on Point2Homes.com OR Vivanuncios.com. It can be confusing when seeing the same house listed by different people because of the exclusivity issue. Once rented or sold, properties may not be removed from the sites - making it even more complicated.
Bait & Switch - unfortunately, this does happen at times. One house is listed and when you call the agent, it's not available but they have another one - typically no where near the one you're interested in OR you think you are renting one house but it's not the house you thought you were getting (see below).
Professionalism - there is a distinct lack of professionalism due to a lack of training. This makes it incredibly hard for agents who take the real estate business seriously to represent clients. For the vast majority, real estate is their side hustle, meaning not their main form of income.
Scheduling Appointments - this is the hardest part of the process. It takes a minimum of 2 to 3 days to schedule showings. There's no centralized system or keycard access. All appointments must be scheduled with the showing agent, who, in turn, schedules with the property owner. The agent wants to know ALL the details of the client - who they are, why they are moving, and when they are moving. THEN, the agent and the owner will decide to show the property. Just because a client wants to see a house doesn't mean they will be able to see it.
Gated Communities - this is a different concept here. Some gated communities are master planned subdivisions with amenities such as a gym, community pool, clubhouse, recreation area, kids area, etc. Others only have a gate and a security guard but NO community amenities. Some have regulations, while others don't.

Examples of recent interactions:

Buyer Client A - sent 11 properties and they chose 5 properties to see. Angel began making calls 3 days before the scheduled appointment day.
Property #1 - under contract
Property #2 - same agent on another property he had to reschedule an appointment (the agent is upset that he had to reschedule and won't confirm the showing for this client)
Property #3 - no response
Property #4 - sold - agent forgot to remove it from the system
Property #5 - house is an Airbnb and can't show at this time

Renter Client B - came to Merida on a research trip 6 months ago and Angel showed him different areas of interest. They looked at 8 rental properties for budgeting purposes. The client moved to Merida, and they went out again. But the client found a property himself and signed a contract through another agent. After signing, the client began having issues. The agent wouldn't respond so he called Angel asking for his help. Not surprisingly, Angel was not in the position to help at that time nor when the client called back at the end of the rental term wanting Angel's help to get his deposits back . . .

Buyer Client C - after a 2-hour consultation with Angel and I, client decided Merida was the best place in Mexico for what she was looking for. Our advice is ALWAYS to come on a research trip first - preferably during the summer - to experience the heat, humidity, and mosquitoes - the reasons why most people leave. We recommend renting first; however, some people want to get settled as soon as possible or are bringing pets with them, which can decrease rental options. She began looking at real estate online (before her research trip) and started chatting with an agent representing a new development in Centro. The price was so good, and the agent was so nice and even spoke English! She sent a $20,000 U.S. deposit on the house, sight unseen due to the "deal" she was promised. We were organizing her itinerary for her research trip, and she mentioned wanting to see the development and her house. As I could not imagine a new development in Centro at the price of $65,000 U.S., I asked her exactly what colonia it was in. She told me that I should know exactly where it was - in Centro - in Colonia Kanasin. OMG! Notably, that's an area we recommend avoiding as it can be a bit rough . . .

Renter Client D - a real estate agent moving to Merida (first time here called to ask our opinion about living in Caucel. She and her husband were interested in attending cultural events, dining in Centro and going to museums. After looking at properties online, the pricing in Caucel better suited their budget. We told her that even though Caucel seemed close, they would need to account for traffic going in and out of the city as well as coming into Centro. It wasn't as easy as it looked on the map and it would be easier if they had a car which they didn't want. We didn't hear anything back for a few months until she called to ask for our help. While in the U.S., she found a property in Caucel and started corresponding with the owner. It seemed appealing as the owner didn't require a second deposit OR a contract. To hold the property for their arrival date, he requested a wire transfer of $250 U.S. She happily sent him the deposit. After arriving and paying the first month's rent, they were taken to the house. BUT it was not the one they had seen online, as it was "no longer available." He explained that he had to switch them to another house. This house had an unkempt yard in a not-so-desirable area. Because they had already paid the first month's rent of $500 and the deposit of $250, they decided to stay. During their second week, the owners of the house appeared. They had been away visiting family in another state and had asked a neighbor to watch their house while they were gone. This was a HARD lesson and happens more often that you would think . . .

To sum it up - real estate here is HARD. It's not easy money like some assume. It takes time to make relationships with legitimate agents. NOT all people listing properties for sale or rent are legitimate. You want to work with a legitimate agent who takes the business of real estate and your investment seriously. Commissions vary and sometimes are NOT shared.

One thing we've noticed (and I am VERY aware of it because I do it, too) is that people tend to romanticize or idealize the information and photos they find online. They picture themselves living in a property, community, colonia, or area - creating a story around it. Imagining modifications they'd make or furniture that would look good - the restaurants, services, or stores within walking distance. Sometimes even comparing a property they've seen to a property they haven't seen . . .

Real estate is all about location AND emotion and moving to another country isn't any different. If you wouldn't do it in your home country, please don't do it here aka create a relationship with someone you trust that will have YOUR best interest at ALL TIMES! AND who will negotiate on your behalf - not just at the beginning but throughout the process and at the end of the lease term or sale.

One final thought - please take everything you read, see, hear, and watch with a grain of salt. Advice is given from the perspective of one person who may or may not even live here. They could have been here briefly or are looking for clicks to monetize. Please fully vet your sources of information, use your best judgment, experience things for yourself, and create relationships with people you trust!