Baja Real Estate Complaints & Reviews

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Research using the words complaints, and problems before buying in Mexico. There are over 600 court cases that have been filed in the last 14 months against developers in the northern Baja area, and the number will be in the thousands soon. Many have put down deposits for homes and condos that have never been built, or sold to multiple buyers. The scams are endless. Never believe what you see on real estate companies web sites. Coldwell Banker of Rosarito is one of a dozen recent bankrupcies filed in the San Diego area leaving hundreds of customers with six figure losses.

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    Baja Real EstateNo requirements for agents in Mexico

    This is from this site:
    http://www.bajainsider.com/baja-real-estate/real-estate-truth-lies.htm

    Lic. J.E. Beaulne, LL.B. provides us another interesting article about legal terms in Mexican real estate.

    I conducted a personal survey on this matter and found that 90% of the salespersons are not qualified when it comes to the legal matters during a real estate transaction in Mexico and, to cover their ignorance they just simply lie instead of saying “Sorry I do not know”.
    .................................................................................................................
    I have found this to be true of all the websites posted by the real estate agents in order to lure foreign investors to Baja. They do not inform buyers of the need for caution. In fact, they try to make it sound like waiting to make a decision will cost. This is not true, especially now that the market has taken a drastic downturn. My agent did not even suggest I offer less on the property I was negotiating. I went back a few weeks later and offered $250,000. on a house the seller was asking $275,000.00 and they settled for $263,000. and paying $15,000.00 of the closing costs. The agent I had gone to was letting me take the asking price. What kind of help is that. Read more Baja real estate complaints to get a clearer picture of the situation.

    This is now a buyers market. But remember it is always buyer beware.

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      • Ke
        Kerri Simson Sep 03, 2007
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        I do not like to see the hostility that is expressed on the previous comment. I agree, it is very important to follow the guidelines issued by the United States, State Department, regarding contracts signed in Mexico, as well as other foreign countries. I also found the information I got when I looked at the Arizona Dept. of Real Estate document I found a link to in some of the complaints and comments on Mexican Real Estate complaints. It seems like a lot of trouble, and risk. I have decided to invest in a mutual fund with a ten year average return on investment of just over 12%. It pays dividends, and capital gain distributions actually, as well as growth on the share price. My broker recommended some American Funds so we divided the money into three funds. A house is a consuming asset. It needs upkeep, regular maintained, and appliances and roofs need replacing. There are higher commissions and fees going in and out, and the capital gains are higher. I can take some of my income from the funds and rent places in different parts of Mexico, instead of going back to the same place every vacation. In fact, I have booked a vacation in Cozumel for next March, and even though it is not in Mexico, rented a condo for my family in Lake Tahoe the week of Thanksgiving for just under $1,200.00. We will probably go to Puerto Nuevo for New Years again, but staying at a hotel is a lot less expensive than buying a house there. I am much more comfortable with my decision not to risk Mexico, and invest in securities that won't cost me money every month, but pay dividends and income regularly. My friend bought a condo in Hawaii, someone who rented it caused a fire and now she is trying to deal with repairs long distance. She is losing sleep. When she told me her story, it reconfirmed I did the right thing. Thank all of you who posted information regarding real estate investments in parts of Mexico. You gave me important facts, because I was emotionally leaning towards buying there. It was smart to listen with my head, and not my heart. Now my heart even feels better. I am not anxious and worried about if I am doing the right thing.

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      • Ke
        Kerri Simson Aug 28, 2007
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        Know first hand what a problem buying in a place like that is. I bought a place in Real Del Mar in 2004 for $170,000.00. It cost $12,000.00 in closing costs, and another $2,000.00 in other fees to establish the trust. I am now trying to sell the place, and have only been offered $220,000.00. I have been to told it is worth $260,000.00 by people in the development and realtors, but I have only had one offer is eight months. I have been paying almost $1,200. a month for three years. That is over $40,000. in interest. When I sell I have to pay 35% capital gains on what the Mexicans consider capital gains, the difference between the $220,000. and $170,000. It is easy to see with the money I also put into furnishing it, this has been a very expensive and not profitable experience. If I had put that money in the same mutual fund I have my 401 K in I would have received dividends, capital gains distributions, and growth on the price of the shares. I thought I was investing, but instead I was getting an education, and I learned a lot from this mistake. I paid a lot for this education.

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      • Ke
        Kerri Simson Aug 11, 2007
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        I saw the CBS story and because it was on the news I thought it would be accurate. Now I have a major financial problem because I bought a house in San Antonio Del Mar. By the time I sell, if I can, I will have lost thousands. Right now I am losing money every month on the interest and finance charges. What happened to responsible reporting? If something sounds too good to be true it certainly is. The people who make money on these things are the ones who get in early and out fast. It is like a pyramid scheme.

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      Baja Real EstateNo laws which regulate the sale or management of real estate in Mexico!

      This is important information. Don't listen to agents and sales people who want to make a buck off of you. Baja real estate guide for homes, land and condominiums for sale in Rosarito Beach, Los Barriles, East Cape, Cabo San Lucas, Tijuana, Ensenada, Mexicali, Tijuana, La Paz and Loreto.

      Buyer Beware: Be advised that there are no laws which regulate the sale or management of real estate in Mexico and abuses do exist. It is always prudent to ask for local references and obtain competitive bids for all services when possible.

      The Mexican Constitution prohibits direct ownership by foreigners of real estate within 100 kilometers (about 62 miles) of any border, and within 50 kilometers (about 31 miles) of any coastline. In order to permit foreign investment in these areas, the Mexican government has created a trust mechanism (contrato de fideicomiso) in which a bank has title to the property, but a trust beneficiary enjoys the benefits of ownership. The Bank Trust Agreement (contrato de fideicomiso) allows for renewable long term leases that may be sold or enjoyed by your heirs.

      A foreigner may be the sole and exclusive stockholder of a Mexican corporation which may hold fee simple title to non-residential property in the prohibited zone. There is a broad definition for "non-residential" property.

      Buyer Beware: Mexico real estate prices that seem too good to be true are usually too good to be true! Many of these "bargains" are located on what is commonly referred to as "Ejido" or communal tracts of land. It is highly recommended that you consult with a Mexico attorney regarding Ejido land rights. Any agreement between the "Ejido" and a foreigner may be revoked or canceled without cause, notice or recourse!!

      Caution: Mexican law recognizes squatters' rights, and homeowners can spend thousands of dollars in legal fees and years of frustration in trying to remove squatters who occupy or rent their property. Always inspect the property and be certain that your property is not occupied by a Mexican citizen in any manner whatsoever. Anyone who occupies the property on behalf of the owner should be totally removed/gone from the property prior to closing. Warning: A Mexico citizen may simply refuse to pay rent and continue to occupy your rental property for a long, long time - maybe years.

      American property owners in Mexico should exercise caution when hiring employees to serve in their homes or on vessels moored in Mexico. Several American property owners have faced lengthy lawsuits for failure to comply with Mexican labor laws regarding severance pay and social security benefits.

      Caution: Exercise extreme caution when considering time-share investments and be aware of very aggressive tactics used by some time-share sales representatives. Buyers should be fully informed and take sufficient time to consider their decisions before signing time-share contracts, ideally after consulting an independent attorney. Mexican law allows time-share purchasers five days to cancel the contract for unconditional and full reimbursement. U.S. citizens should never sign a contract that includes clauses penalizing the buyer who cancels within five days.

      A formal complaint against any merchant should be filed with PROFECO, Mexico's federal consumer protection agency. PROFECO has the power to mediate disputes, investigate consumer complaints, order hearings, levy fines and sanctions for not appearing at hearings, and do price-check inspections of merchants. All complaints by Americans are handled by PROFECO's English-speaking office in Mexico City at [protected]. You might also complain about the lack of an English translation for the PROFECO web site.

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        • Ke
          Kerri Simson Sep 01, 2007
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          Verified customer

          I did not buy my home in Mexico as an investment. That would have been stupid. I bought it because I liked being away from my relatives and most of them are too afraid of the cops in Mexico and other things that have happened to tourists to visit. When I want to see them I go there. All kidding aside, I bought it because I wanted it. I am not going to sell it. Anyone who has bought three or four condos anywhere just to flip them for profit gets what they deserve when they are speculating. These people ruin the market for basic people who are looking for a place to live. What will happen over the next three years is a normal adjustment. Prices will drop to where they should be. If you really want a place in Mexico, be patient, wait about three years, and you will get a realistic price, because it is getting just too expensive for these (speculators)investors to hold on and pay the interest they are. I don't feel sorry for any of the developers or speculators who are sitting there with unsold property. They tell everyone to buy and that they will make money, only because THEY want to take the money. Never buy in Mexico as an investment, do it as entertainment, it is a vacation, or something. Look at it as money spent. That way if something happens and it is taken away from you, you won't be disappointed.

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        • Ke
          Kerri Simson Aug 28, 2007
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          know first hand what a problem buying in a place like that is. I bought a place in Real Del Mar in 2004 for $170,000.00. It cost $12,000.00 in closing costs, and another $2,000.00 in other fees to establish the trust. I am now trying to sell the place, and have only been offered $220,000.00. I have been to told it is worth $260,000.00 by people in the development and realtors, but I have only had one offer is eight months. I have been paying almost $1,200. a month for three years. That is over $40,000. in interest. When I sell I have to pay 35% capital gains on what the Mexicans consider capital gains, the difference between the $220,000. and $170,000. It is easy to see with the money I also put into furnishing it, this has been a very expensive and not profitable experience. If I had put that money in the same mutual fund I have my 401 K in I would have received dividends, capital gains distributions, and growth on the price of the shares. I thought I was investing, but instead I was getting an education, and I learned a lot from this mistake. I paid a lot for this education.

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        • Ke
          Kerri Simson Aug 11, 2007
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          The important thing in investing in real estate anywhere is to take time. Anyone that trys to make you feel that this is the last chance to get something is applying pressure, and should not be trusted. I agree, renting is easier, cheaper, and easier to get away from should you change your mind.

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        • Ro
          robert roels Aug 10, 2007
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          There is no real ownership for foreigners living along the coast line in Mexico. And these bank trusts? What happens if the banks fail? They are the real owners of the property.

          I have lived there full time for a while in the Ejido Primo Tapia in Marbella. Since the property was purchased in the mid 90's we were promised titles we had paid for, but never received. There was to be a height restriction for homes and trailers were supposedly not allowed, that never happened. They opened up a sewage treatment plant a block away from my house after the home was built. The smell at times was atrocious.

          It turns out that the so called titles were to be issued at the end of last year, but were in reality a "Certificate of Occupancy".

          I lost my home because I was in dispute with my ex (A Mexican born American) who hired an attorney, Jesus Moreno Guzman from Tijuana. He threatened to fabricate criminal charges against me and had successfully cut the power to my home and I was not able to restore. He also libeled my character.

          Under these auspices and due to unscrupulous actions by the Ejido Primo Tapia in conveniently losing a record of my co-ownership with my ex, I was forced to leave as I did not relish the thought of spending time in Tijuana jail. It's only a house.

          My home had been broken into a total of five times and losses were into the thousands. I am 55 years old and a software designer. I knew or associated with 6 people who were murdered within a half year span a few years ago, including my neighbor who was a policeman and was beheaded.

          I love Mexico and many people are honest. However I would never buy there again. Renting is a lot more viable and less expensive. Be careful. We thought we were. And how do you know if your attorney is honest or competent. English documents hold no legal basis in Mexico. I knew a lot of people down there and am or was aware of many property disputes etc. It's not only the Mexicans, the Americans trying to unload or turn a quick buck are even worse. Watch out!

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        • Ma
          MannyMo Aug 07, 2007
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          If you end up buying property in Mexico you should always get Title Insurance. It usually runs for 5 dollars per thousand but it's all worth it.

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        • Ke
          Kerri Simson Aug 07, 2007
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          Verified customer

          Thanks for the informative post! I am sure the property owners and real estate agents needing to unload problem properties don't like you warning us about the risks of doing business there. It is really scary, no building codes, no city permits and inspections (a real estate walk through is NOT a building inspection.) Unlicensed realtors with no board to govern them, their association board is not a licensing board, and the courts are back logged with cases that make any litigation take years. Yes, rent, don't buy if you go there. If you rent for a while, take your time and get to know the system, then and only then, if you want to buy, then you will be much better prepared.

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        Baja Real Estate — Very poor service!

        What I Learned the Hard Way About Mexican Real Estate. Problems at Las Olas Mar y Sol: BY MICHELLE MARINA...

        Baja Real EstateWhat sales agents and developers don't tell you!

        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:

        http://www.re.state.az.us/PUBLIC_INFO/Documents/Consumer_Guide_MEX.pdf

        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, http://travel.state.gov/travel/cis_pa_tw/cis/cis_970.html#real_estate

        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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          • Ke
            Kerri Simson Aug 18, 2007
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            Verified customer

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

            1 Votes
          • Ke
            Kerri Simson Aug 07, 2007
            This comment was posted by
            a verified customer
            Verified customer

            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.

            0 Votes
          • Mi
            Michelle Marina Aug 01, 2007
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            a verified customer
            Verified customer

            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.

            0 Votes

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          Baja Real Estate — Poor service!

          I was sent this link from a friend who knows I was thinking about buying in...

          Baja Real EstateDisclosure of problems not required!

          If you buy property that a seller is getting rid of because of structural problems, they do not have to be exposed. So if someone tells you they are only selling because they want to live closer to their grandchildren, you move in and find out that the foundation is eroding, because the ground is unstable, you have NO recourse. That is what happened in Real Del Mar in Baja. It is truly buyer beware. Have an expert inspect any property before putting money down. You will be spending good money after bad to either fix it or try to sue. But if the person has left the country, and the transaction happened in Mexico, you have to get them to go to Mexico in order for you to sue them, and they have to have assets in the area of Mexico that you can trace. You really need to think about the differences before thinking about taking the risk. If you want to live there, rent.

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            • Ke
              Kerri Simson Aug 07, 2007
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              a verified customer
              Verified customer

              I live in San Antonio Del Mar. We have problems all the time. Coastal property is going to slip no matter where you are. The city of Tijauana has jurisdiction over most the area to Rosarito. If you complain they make it hard on the complainer. Oh, if a developer says you have a private beach, that is a lie. The law makes all beaches the property of the country, and everyone has access, if you deny it you can lose your property and go to jail.

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            Baja Real Estate — WARNING about buying in Baja!

            I have seen numerous new complaints posted against developers in Baja. The business practices of Real Del...

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