Nov. 2, 2007 03:10 PM
So many Valley residents have second homes in Puerto Penasco, Mexico, you might think it’s a suburb of Phoenix. But it’s not. You know Rocky Point, as it’s widely known, is in a foreign country, and that means the laws are different. But potential buyers might not know there is little hard information on the Mexico real estate market for buyers. No sales numbers. No median prices. No trends.
Bruce Greenberg, a Tucson-based appraiser with vast experience in Mexico, says property values in Rocky Point had been doubling every year since 2001, until the slowdown hit last year. He says prices have now retreated to 2006 levels, and there is an oversupply of properties on the market.For anyone wanting to jump in to the market, here’s some advice from Greenberg and Rocky Point real estate agent Grant MacKenzie Sr., a Realtor who’s worked in the market for 20 years.
· Foreign citizens hold property in Mexico under a bank trust that is renewable in 50 years. The trust confers the same rights as a title. “I’d look at it as if it’s your own title,” MacKenzie says.
· Talk to an accountant, a lawyer and a real estate professional who specialize in Mexican real estate before you buy, Greenberg says. “If they say they do things different in Mexico, it’s an identical process.”
· How do you find those services? MacKenzie suggests asking the title company or appraisers for the names of people whom they trust and who have been in the market for many years. Several U.S.-based real estate professionals — agents, title companies, lawyers, mortgage companies — do work in Mexico.
· Ask the Realtor if he or she is licensed. “This has been the wild wild West of real estate for the longest time,” MacKenzie says. The state of Sonora, home of Rocky Point, is now requiring real estate agents to get training for a license.
· Do not hand over money to anyone other than a reputable escrow company. With the real estate market going south, some projects in Rocky Point could fall through.
· Ask about your protections in a real estate deal. An American professional doing work in Mexico might not be covered by Arizona’s consumer laws.
· And finally, it might sound flip, but both Greenberg and MacKenzie offer the old advice: “Don’t leave your brains at the border.” If the deal doesn’t feel right, don’t do it.