real estate agent

I have to agree with Gene, and say that it galls me when Mexicans charge the same (Or in this case, MORE) for a service than in the US. My home(s) in the US have been listed/sold for 6% and there is far more advertising cost involved, same commission splits, and the cost of living in the US is considerably higher than in Mexico. In other parts of Mexico, the RE commission is 5%.

Same is true with guided fishing trips. Here they charge $450, to ride in a small Panga with a 55hp motor, for distances that are a fraction of what they are in the States...where you ride in a modern skiff with an engine two to three times as big. (only meaning more expense)

But Gene, having held a RE license in the States, I have to ask....what kind of advertising have you done on your own? Have you put ads in the paper, and if so, what kind? For example, one of those little cheapy ads will blend in with all the others. IMO, you need to take out a bigger ad, so that it will stick out and be seen.

Another trick is to try and be sure your ad is at or near the top of all the similar listings. Some papers in the States, place the newer ads on top. If this is the case in Cancun, then you want to run your ad every other week, so that when it is run, it will be a new ad, and closer to the top.

And as someone else already said...if you don't speak Spanish, you'd better find a friend who does.

 

I may get the exact % wrong but something close to 90% of real estate sales are not closed by the listing agent. That is, the agent you list the property with has only a 10% chance of selling it without having another agent bring in the buyer. If you want to sell the property anytime soon, especially in a down market like this one, you will very likely have 2 agents involved. That's reality.

The way I understand AMPI's commission structure it gets lower as the property value goes up. So a $700K USD property will have a lower commission percentage than a $150K USD property. The problem is that there is the same amount of work to do to sell a cheaper property as to sell a more expensive one, sometimes more because you are dealing with buyers and sellers who are more uptight about money because they have less of it and don't want to waste a penny.

Here we don't have anything like an MLS database, the way the US has. So just the research of finding properties for sale when you have a buyer lined up is a huge thing to do. Having an agent that will do all the paper work and will advertise enough to get your property noticed by other agents who have buyers is a lot of work too.

Being a real estate agent here is very, very difficult. If you are bilingual, honest and know the ropes you deserve the money because you put up with a hell of a lot of shit to sell real estate here. Anyone who thinks real estate agents here have it easy is wrong. Granted lots of agents are crooks. But both Cyndi and Carmen are honest and fully qualified.

 

RiverGirl, I agree totally with your first 2 paragraphs, and the same is true in the US. Many agents are content to go out and get listings, and then let someone else do the work for half the commission. It is also true that in parts of the US, that the commission rate drops as value goes up. The multi-million dollar waterfront homes in my area, are listed at about 3%, and a mega-estate, like Tiger Woods' on Jupiter Island might be listed for half that.

And I don't disagree that "selling" agents don't have to work very hard for their money.....BUT...certainly no harder than those in the US, and that was my point. Cost of living for the agent here, is dramatically lower on an annual basis (due mostly to taxes and insurance) so why do Mexican agents need to make more than those NOB? Especially since so many big-ticket items, like Real Estate, are listed in USD. I mean, now that the dollar is up to near 13/peso, do they lower the prices of their listings? I think not. But the difference, in 2 month's time, on a 150,000 USD home in Cancun, is 555,000 Pesos, or almost 43,000 USD. That's why your RE market is so flat.....you've priced everything out of the reach of the average Mexican, in hopes of luring one of the ever-dwindling number of naive Gringos into the deal. Smart money is not going to be buying too much in the Cancun area...at least until this world financial crisis straightens out.

 

I'm not sure the cost of living is lower here than in the US. It's different for sure. Milk costs more here. Clothes cost more, or are shittier quality. Cars are lower quality and there's more in the low-end market but they don't last as long. In the states I had 4 Hondas in a row and put over 100K miles on each of them. Cars here don't make it to 100k very often, they die first. Computers and electronics cost 30-40% more here.

If you operate outside the tax structure here you can pay lower income taxes, or none. But my hubby works for the gov't and his tax rate is higher than we paid in the states.

Our house here cost less than our condo in the States did. But there's litter and potholes and rednecks and there aren't enforceable sound ordinances and few parks and laws don't get enforced here. Property taxes are way lower here, but you get almost nothing for them. In the states you pay higher property taxes and you can consider putting your kid in public school, here forget that. In the states your public dollars bring you cops in times of emergency and firemen with proper equipment and roads that are maintained well enough that they don't break your car's suspension.

The water here is so hard that you have to retrofit a softening and filtering system or plan to replace all your faucets every 4 years. And of course you can't drink the water here so you have to buy drinking water.

The cost of living here is high. It's just that we all move here and accept a lower standard of living. If you accept a lower standard of living then maybe it can be cheaper here.

As for how hard the agents work here it's a different ball game than in the states. To work with American/Canadian clients you've got to be bilingual. Then you've got to deal with the huge percentage of folks who come here on vacation and get all ga-ga and decide to look at property but who are ultimately wasting your time because they get home and begin thinking practically and decide not to buy here. I think there's a huge amount of tire-kicking here that doesn't happen in other places I've lived.

And not having a centralized Listing Service makes all the work tons harder to do. Just lining up 3 or 4 good props for a buyer to see might take you several days of work. In the states it would take a couple of hours of perusing the MLS and making phone calls. Here you have to arrange showings carefully because no one trusts anyone, so you will never see a lock-box with a key to the property in it, you will never see anyone do a showing without the seller present. But having the seller present lowers the chance of making the sale happen.

You might think 7% is high. But having worked in real estate here I think 7% for cheaper props is fair. And I also think that it's reasonable to ask for an upfront non-refundable fee (against a future commission) from prospective buyers so that if they waste weeks of your time while you chase props for sale, and then they don't buy, that you don't have to just eat it.

There's another thing. The more cheap you are the harder you are to work with. This has been proven to me over and over. If you want a smoother, quicker, easier transaction then pay the agents properly and they will work hard for you. If you get all cheap on them and nickle and dime them then you become a problem client, and they need more money from the transaction to make it worth dealing with you.

 

I think that the problem is , is that you are not in the States your in Cancun and you do not speak spanish.

 

I guess if you're a Gringo, a lot of your opinions have to do with where you came from in the States. For example, my home in Missouri had a well, and the water was hard. I should have put in a softening system....but didn't. On top of that, a 20 ltr. garrafon of water lasts me about 10 days. That's about $55 a year, if I never leave home. In the states, the water portion of my bill is $35 a month, and that's if I'm away, and don't consume a drop. I don't drink plain water (boring!..UGH!) Here I use that water only for coffee, and to fill my ice cube trays.

On top of that, if one moves to Mexico, expecting the same standard of living in terms of civil maintenance of roads, police protection, public schools, litter, street noise, etc.,etc., then IMO, you never should have moved here in the first place. I believe that if we choose to live here, that we should decide to embrace the Mexican culture for what it is....different to say the least, but in some ways, better, just because it is simpler for most. You think Cancun is expensive? You should move to San Miguel Allende or the Lake Chapala area, just outside Guadalajara, where there are huge American communities. Property prices and cost of living are out of site, because all these expats tried to bring America with them to Mexico. More power to them.

And in some ways worse. I guess it all depends on what matters to you, and how you want to live. If you have to have a lot of electronics, well....I guess what I'm trying to say, is that you haven't convinced me that Cancun Real Estate agents should get 2% more than the agents in much of the rest of Mexico, and 1% more than the US. (You think bilingualism isn't necessary in So. Florida, or California, Arizona, New Mexico, Texas???) And I'm fairly sure that not all of the RE agents in Cancun are bilingual.

 

I have been trying to sell a piece of land in Cancun for a while, I have talked to different real estate agents and MANY "corredores" or I should say self employed real estate wannabes, one thing I learned...CHEAPER IS NOT BETTER, so I am still selling my land, no buyers.

The safest bet will be with somebody that you can trust and that has been referred to you by good sources, right now I have my land for sale with Barraza Assoc. he is the President of the AMPI in Cancun, I will pay them 7% because he has many connections and will be listing it in the whole country of Mejico, not just Cancun, I am tired of dealing with middle people who are not doing the job.

There is also a lot of FRAUD going on regarding Real Estate transactions, you want to be with someone who will do everything by the book.

Hola Caro

 

I find this such an interesting subject.

In the states I believe the average rate is 6% but, in Florida now many sellers would probably pay 10% as the market has gone south.

I am unsure what cost of living has to do with what the percentage should be. The cost of the average house in Cancun is less than the average house in the U.S. which means the average commission would be less.

I always tipped the same 15-20% in Cancun that I did in the U.S. (even though my Mexican friends thought I was crazy).

Gene I would not recommend that you agree to a percentage that you are not happy with but, I would assume that if you are paying below average commission you will get below average work.

 

I'm paying 6% on my Florida home now, but I have heard that they're trying to raise the rate. There was a sort of revolt against this before the bubble burst, so I confess to not knowing what the story is now. But usually...Real Estate agents garner their "raises" through the natural appreciation of property which, in normal times, is 5-7% per year, depending on location.

I brought in the cheaper cost of living factor to support my argument against this 7% thing. I'm sure most of you/us shop at WalMart, Costco, etc., because we think we are saving money....and in some cases that's true. But most food is cheaper at the local mercados. It's just that WalMart offers one-stop shopping and things like meats can be bought with a little more peace of mind in terms of food safety. Traditional Mexicans, on the other hand, are used to going to a tienda for meat....another one for produce, and another for bread, etc.. BTW, Home Depot is another example of the "one-stop" theme. Prices for most items are a LOT cheaper in local hardware stores. Point is, that a less expensive cost of living can be had in Mexico....even Cancun. (which some Mexicans feel is not a part of Mexico....much like true southerners don't think of Florida as being a southern state)

I just paid my property taxes in Florida, and they were $3350.00 for my 2000 sq. ft. home. Here, including the fideocomiso, my total yearly payout is less than $650.00 on a home that approaches twice the size. I don't need homeowner's insurance, so there's another savings of $1000.00 a year. So between the two, I'm saving about $3700 a year, or there's an extra $300 a month or (today) more than 3600 Pesos that I have as disposable income. That's where the real Mexican savings comes in, and I haven't even touched on health insurance, because that's different for everyone. But I think that any policy here, regardless of how "inclusive" it is, will be thousands cheaper in Mexico, than in the U.S.

So if the service sector lives cheaper, why do they have to charge more for the same service? There's only one reason: They think they can get away with it.....and in many cases they can.

I just remembered another thing. Isn't the IVA in Quintana Roo only 10%??? In most of the rest of Mexico it is 15%, so depending on how much you spend in a year, that can add up to a huge savings over time.

Oh, and John....I tip at 10% here in Veracruz, or slightly more if it just happens to come out that way. Cancun however, is a different world, and there are a lot of international eateries. But in other parts of Mexico, you might be surprised at the percentage of Mexicans who leave NO tip at all....or just the coinage portion of their change. Ever wonder why you got 60 pesos change for a meal in coins, rather than in notes? Happens here all the time. Over-tipping is not always a way to insure good service, the next time you visit a restaurant, as the waitstaff may just think you're showing off your money. I believe in tipping the same as my more educated Mexican friends have suggested.