Everything you need to know about buying and selling real estate in Mexico, Puerto Vallarta, and the Banderas Bay region

Our Culture Affects How We Negotiate Real Estate Purchases

Negotiating Tactics & Bargaining Power

North America is three countries which are physically close, but each has a different history and culture.

Which cultural aspect do you associate with the following countries?  Canada/ USA or Mexico?

COUNTRY A COUNTRY B
Family Family is the first priority.
Children are celebrated and sheltered.
Wife fulfills domestic role.
Mobility is limited.
Family is usually second to work.
Children often minimally parented; are independent.
Wife often fulfills dual roles.
Mobility quite common.
Religion Long Roman Catholic tradition.
Fatalistic outlook.
“As God wills.”
Mixed religions.
“Master of own life” outlook.
Education Memorization.
Emphasis on theoretical.
Rigid, broad curriculum.
Analytical approach.
Emphasis on the practical.
Narrow, in-depth specialization.
Nationalism Very nationalistic.
Proud of long history and traditions.
World View
Very patriotic.
Proud of ” Way of life.”
Assumes everyone shares his/her materialistic values.
Personal Appearance Dress and grooming are status symbols. Appearance is secondary to performance.
Status Title and position more important than money in eyes of society. Money is main status measure and is reward for achievement.
Aesthetics Aesthetic side of life is important even at work. No time for “useless frills”.
Ethics Truth is tempered by need for diplomacy.
Truth is a relative concept.
Direct Yes/No answers given and expected.
Truth seen as absolute value.

 

High Context vs Low Context Countries
Buyers from different cultures may try to renegotiate a purchase agreement after it has been signed, but this is not a matter of ethics. America is a “low context” country where everything is spelled out between people either verbally or in contracts. Other countries are “high context” where much more information is derived from the context of the communication and less is spelled out.

In high context countries it is understood that contracts are only the beginning of a relationship, which can change as the parties get to know each other. The parties are expected to help each other “adjust” the contract to their needs until it is completed.

When doing business in a high context culture such as Mexico, Japan or the Middle East, you might encounter the following:

  • Misunderstanding when exchanging information
  • Impression of a lack of information
  • Large amount of information is provided in a non-verbal manner, e.g. gestures, pauses, facial expressions
  • Emphasis on long term relationships and loyalty
  • ‘Unwritten’ rules that are taken for granted but can easily be missed by strangers
  • Shorter contracts since less information is required

When doing business in a low context culture such as Germany, Switzerland or the US, you might find the following:

  • All meaning is explicitly provided in the message itself
  • Extensive background information and explanations are provided verbally to avoid misunderstandings
  • People tend to have short-term relationships
  • People follow rules and standards closely
  • Contracts tend to be longer and very detailed

Negotiating Tactics
Countries tend in real estate purchases to be either negotiating or non-negotiating types.  In the majority of countries around the world, people haggle on everything from groceries to clothing to homes.

Experienced negotiators know that when they first make an offer on a home, it is the lowest they will ever be able to go. They can only go in one direction from there – up. This is why they will start embarrassingly low with their initial offer even if they may be willing to pay full price.

Bargaining Power
Veteran hagglers know they have the most bargaining power just before close of escrow. This is when they will usually ask for one extra concession to show their skill. If the seller was willing to concede a refrigerator or clothes washer or dryer, it’s best not to include it in a purchase. At close of escrow it can be added in the sale in order to close further negotiating.

– Matthew Maclachlan writes and teaches about high and low context cultural differences.

 


This article is based upon Flex MLS reporting, legal opinions, current practices and my personal experiences in the Puerto Vallarta-Bahia de Banderas areas. I recommend that each potential buyer or seller of Mexican real estate conduct his own due diligence and review. If you have any other questions, contact me through my website.

Harriet Murray

harriet@casasandvillas.com

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