ESCROW; AN IMPORTANT REQUIREMENT FOR REAL ESTATE TRANSACTIONS

Many people are under the impression that buying property in Mexico is unregulated, an impression that is certainly wrong. When a buyer or seller deals with professional real estate agents, every step of the transaction is recorded to ensure all involved are protected.

Mexico is an important recipient of foreign investments. People around the globe often come to the country as tourists where they fall in love with the sandy beaches, the culture, food and the hospitality. And they think that it would be a good investment to have a property in the Mexican Caribbean. However, before taking the plunge, investors always need to assess the risks involved when buying in another country.

One of the tools available to mitigate such risks is the financial figure of the escrow account. When a transaction is said to be in escrow, it means that a negotiation has taken place, the parties involved have agreed on terms and at least earnest money has been deposited in an impartial third party bank account specified to complete the purchase.

Escrows have become the norm to provide a secure financial transaction. Here are some reasons why every investor should consider it:

• Protection of investment money: An escrow account protects the money of the buyer and seller against unprofessionalism, as well as negligent intentions of any of the parties, pure bad luck or tragedy (e.g. seller’s or buyer’s death).
• Avoid potential misunderstandings: None of the parties with a financial interest in the transaction (buyer, seller or brokers) controls the funds involved in the transaction. This should reduce the risk of potential conflicts and misunderstandings between the parties.
• Above all, transparent transactions: Both parties will have a clear financial statement on how funds are managed and disbursed. Since escrow accounts only accept bank transfers, and professional escrow companies would have accounts based in the United States, accepting only US dollars, there is no problem of dubious or hidden fees. This means that the whole process is transparent giving additional security to the investor