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Real Estate Rip Offs

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Real Estate Rip Offs

Post by Intercasa on Sat Sep 18, 2010 7:45 pm

As the times get bad and sales go down some owners and agents mismanage their money and don't adjust with the times there are more and more reports of agents and agencies blatantly stealing client's funds or making any excuse to take a buyer's deposit.

How can a person protect themselves? There is no easy answer. There is also an old adage in real estate that buyers and lawyers are liars so sellers need something to show a buyer is serious and has something at stake.

In the US we use a 3rd party escrow company to hold the funds. There really are limited choices for escrow here in Mexico, there is Stewart Title (who has no local offices, closest one is in PV) and First American International Division in Miami. I've used both and found that Stewart's service levels and accounting methods were not up to US standards when I used them a few years ago (I'd NEVER use them again).

People should seriously think about using an escrow company and not having the real estate company hold their money. There have been issues with a few companies and who can really predict who the next scammer will be. It might be a good practice to trust nobody with any substantial amount of money that you cannot afford to lose.

The most surefire method to not get scammed is to use an escrow but then again maybe the seller won't accept it either out of ignorance or at the urging of the real estate company who wants to handle your money.

Either way, an escrow will run $500 to $750US to both buyer and seller and some people here are pennywise and pound foolish.

I personally don't see the large agencies taking people's money BUT who knows. The official forms here are poorly worded where contingencies are involved and if you have a large agency involved with a smaller one who knows, not saying smaller ones are bad or better. I know of a few agencies involved in the supposed wrongfully taking of money from people.

This post is to make people think and attempt to protect themselves. The people who might steal your money probably won't tell you beforehand.

One simple way is to have an explicit contract. This means actually doing work and not using a standard form if you have special circumstances. Some real estate people have little education in contracts and you should assume that everything will go wrong and seek to avoid any and all ambiguities. I have seen some contracts and addendums here that are truly horrible and are as clear as mud, this is especially disturbing when there is lots of $$$ involved.

With the current climate of financial desperation one's thinking should change from "This is Mexico and everything always works out" to caution.

Sorry to the real estate people BUT there are your competitors who have brought this on and nobody can foresee who will scam next. Any professional will take steps to protect their client but the clients also need to be informed. Bottom line is that to protect the client will mean changes and the unknown and it may be difficult to explain and even a pain in the butt, some may shy away from protecting the client for these reasons (but won't admit it or explain it like that).

There is a decent number of people involved in real estate here who are not paying their bills and who are hurting and who may be tempted to "rob Peter to pay Paul." There are also many good hearted professional people who would never take a penny from another and rather starve then violate a client's trust. The hard part is differentiating the two types of people as you cannot read the mind and heart.
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