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Baja Real Estate / What sales agents and developers don't tell you!

1 Mexico Review updated:

I saw a show on CBS Sunday Morning about the Baja Dream. I went to a Coldwell Banker Baja office thinking since it was an American based company I could be safe. I ignored what I saw about getting legal council. I put $5,000. down to hold the property, being told that I would get the check back when I sent the down payment to them. A few months after sending the down payment I discovered Coldwell Banker cashed the check. When I called them they said the developer told them to use it for commissions. I had a receipt, but the deposit was not mentioned in the contract. Then the developer never delivered the house. They said they could not build it and they would give me a lot instead. The contract said they would deliver the house in November 2005, tentatively. The word tentatively gives them all the time in the world. A good attorney reviewing the contract would never have let them put that word in. There were many things about the contract my attorney said should not have been there, but I did not have him before I signed. Now I have him trying to get my money back. So, don't think you are smart enough to do this on your own, and don't trust the real estate agents or developers, they have a vested interest in the sale.

I want to alert others that it is very important to listen to the advise of agencies in the United States about how to buy real estate in Mexico. I did not, and now I have a lawsuit.

Here is a link to a pdf file published by the State of Arizona real estate department. It explains the differences in buying real estate in Mexico and the U.S. especially Arizona:

You will understand why it is important to use an attorney, not just a real estate agent.

I say this, because I went to Coldwell Banker in Baja, and decided not to use the attorney. I wanted to save money. I thought I could research on my own on the Internet. Short version of the story, I now have an attorney, and a lawsuit to recover my deposit and damages. Though I was told my $5,000.00 deposit would be returned when I put down my down payment, Coldwell Banker cashed the check. They said that the developer told them to use it for commissions. I had a receipt for the deposit, but nothing in the contract about it. They also did not have my down payment put in an escrow account. I thought Coldwell Banker could be trusted because it was an American company. Again, learn from my mistakes, and follow the guidelines.

This is from the United States State Dept. website,

REAL ESTATE AND TIME-SHARES: U.S. citizens should be aware of the risks inherent in purchasing real estate in Mexico, and should exercise extreme caution before entering into any form of commitment to invest in property there. Investors should hire competent Mexican legal counsel when contemplating any real estate investment. Mexican laws and practices regarding real estate differ substantially from those in the United States. Foreigners who purchase property in Mexico may find that property disputes with Mexican citizens may not be treated evenhandedly by Mexican criminal justice authorities and in the courts. Time-share companies cannot be sued in U.S. courts unless they have an office or other business presence in the U.S. Consumers should contact a Mexican attorney, the Mexican consumer protection agency PROFECO, or other consumer information agency for information on companies that operate outside of the U.S.

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  • Mi
      1st of Aug, 2007
    0 Votes

    I am a US based real estate agent, and I have sold nine condos at Las Olas Mar y Sol to US clients. I feel that anyone should be able to ask and receive answers to real estate questions without fear of receiving threats. I and my family have been threatened by Mr. Crosthwaite, the developer at Las Olas Mar y Sol, I have not received my commissions, and at this point most of my clients are asking for full refunds.

    I stated before that I would be the first to say if Mr. Crosthwaite has fulfilled his obligations. So I hereby report that he did refund Mr. Rich Soranno’s $10,000 earnest money deposit. However, it took countless phone calls, attorneys, and press exposure to achieve this. Also, I now have two other clients that are requesting refunds, but neither Mr. Crosthwaite nor his agent Gustavo Torres (Remax-Baja) has responded to those requests. I have not received my commissions because Mr. Crosthwaite has ordered me to write a favorable statement about him, subject to his approval, before he will pay me the money he owes me. I stand firm that I will not write a favorable letter just to collect those commissions.

    I submit to the public the following list of questions and issues that created the problems with Mr. Crosthwaite. I invite the public to judge for themselves whether these are questions that others should ask, and whether my life should be put in danger for asking them.

    1. Trust Agreement. If the contract states “Promise of a Trust”, then what kind of trust is being promised? Is it a Real Estate Bank Trust or an Administrative Trust? There is a huge difference between the two types of trusts.

    2. Exhibits. If the contract refers to Exhibits, they should be attached to the contract and provided to the buyer for full review.

    3. Upgrades. There should be a price list of upgrades that can be added.

    4. Homeowners Association Fee. What will be the amount of the dues, what is included in the fee, and will the homeowners take control of the Homeowners Association eventually, or will it be controlled by the developer?

    5. Actual Closing Date. The contract states that the Trust Agreement will be executed within 24 months after the execution of the contract. What if the building is not complete?

    6. Initial Earnest Money Deposit. The contract stated that "said earnest money will simply be held and then returned when 30% down payment has been placed". Does the term "simply held" mean that the check will be cashed or not cashed?

    7. Notary. The contract states that the Trust Agreement shall be executed before the Notary Public appointed by the developer. Why can't the Notary used be of the buyers choice?

    8. Release of Funds. The contract states that money is to be released by the Title Company to the developer at certain stages of construction. If so, then why aren't the buyers notified when the funds are released? If money is being released, who is checking to see that this part of the construction has actually been started?

    9. Unit Re-sales. Las Olas Mar y Sol requires that re-sales go through his company. Why would he sell your unit before he sells his own?

    10. How many towers will be going up at this site?

    The following additional items are things that are not related to Las Olas Mar y Sol, but that I have learned while trying to buy real estate in Mexico:

    1. The Spanish Version of the Contract Applies in Court. Buyers should not necessarily believe that the contract says the same thing in English and Spanish.

    2. Select your own Attorney to review your contract. Do NOT hire an attorney that is referred to you by the developer!

    3. Construction Bond. Ask whether the development is covered by a construction performance bond.

    4. Disclosure of relationship between your agent and the developer. If your real estate agent or that firm has a partnership in the development, they do not disclose this to you! This may be the main reason that they are trying to sell you a particular development!

    6. Get it in Writing. For agents, get your commissions due you in writing at time of contract. For buyers, if you make any additional agreements with the developer, get it in writing! DO NOT assume that they will honor any verbal agreement.

  • Ke
      7th of Aug, 2007
    0 Votes

    I was in Baja and spent time with an agent, and they never mentioned that I should get legal advice. I am so glad to have seen this important warning! You are right, they act like it is as safe as buying in the states, and now I see there are no building inspectors and the real estate agents are not licensed. No wonder a person has to hire their own attorney. I am going to rent if I want to go there, it is obviously a BIG mistake to buy. Thank you for saving me from a HUGE mistake.

  • Ke
      18th of Aug, 2007
    0 Votes

    Don't be a fool, only rent, never buy in Mexico.

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