PUERTO VALLARTA (PVDN) – As the dream of homeownership in Mexico becomes an increasingly popular aspiration among expats and retirees, potential buyers must be aware of the growing risk of falling victim to real estate fraud.
Homebuyers in Mexico lose an average of $35 million US Dollars every year to real estate fraud.
According to the latest survey by the National Institute of Statistics and Geography (INEGI), fraud ranks as the second most common crime in Mexico, right behind street robbery or assault on public transport. The survey revealed that an alarming 5.4 million cases of fraud were committed in 2021, representing a rate of 5,907 frauds per 100,000 residents.
The most common forms of fraud were related to financial transactions; 45.1% involved debit or credit card scams, while 43.4% involved payment for a service or product that was never delivered.
The Mexican Association of Real Estate Professionals (AMPI) warns that the real estate industry is a key target for these fraudulent activities. An estimated 600 million pesos are lost annually due to illegal activities in the industry, particularly scams.
Common real estate frauds range from announcing properties with deed problems, collecting upfront fees without guaranteeing the transaction, to selling or renting properties without the owner’s consent. Other tactics include offering quick loans without verifying the applicant’s background, hiring fraudulent advisors or agents, identity theft, providing false or missing documentation, and misrepresenting property details.
For those in search of a home, it’s crucial to verify the credibility of real estate companies and individual agents. This includes checking the provider’s tax registration (RFC) and reputation online, and confirming their registration with the Treasury. Additionally, prospective buyers should research previous complaints lodged with the Federal Consumer Protection Agency’s (Profeco) Commercial Bureau.
Real estate agents must also be vetted. Even if they’re working independently, they should be endorsed by a professional association. Organizations such as the Association of Real Estate Marketing Professionals (AMPI), Real Estate Group of the Western Zone, and Union of Real Estate Professionals of Mexico can aid in this verification process.
Prospective homeowners should also check property registration numbers and deeds with the Public Registry of Property. The Institute of Administration and Appraisals of National Assets provides a platform for such consultations.
INEGI’s latest figures suggest that of the 35.3 million privately inhabited homes in 2020, 57.1% were paid in full, 10.7% were still being paid for, and 16.4% were rented. The Federal Mortgage Society reports that the national average price for a median home with a mortgage loan stood at 1,601,000 pesos in the first quarter of 2023.
Given the significant investment required to purchase a home, potential buyers are encouraged to thoroughly investigate all aspects of a property transaction to avoid falling victim to real estate fraud.
PUERTO VALLARTA (PVDN) - As the dream of homeownership in Mexico becomes an increasingly popular aspiration among expats and retirees, potential buyers must be aware . . .
