What was once a dream is now a reality as you venture out into your quest to owning your very own piece of Caribbean Mexico property. But strangely, you still find yourself lying awake at night; tossing and turning with all those buying questions just swirling around inside your head. Fear not! All your questions are finally going to be answered.
This is everything that you have ever wanted to know about escrow in Mexico and how it works; broken down into this two part simple question and answers piece.
What is an “escrow”?
When used in the context of transfer of title, the escrow generally involves three parties – the buyer, the seller and an independent third party. It often involves the deposit of monies from the buyer and documents from the seller, to be exchanged and delivered upon the execution of the instructions. The independent third party is often called “the stakeholder”.
The Buyer/Seller disbursement instructions are prepared by the escrow company in compliance with the terms of the purchase/sale contract. They are then signed by the buyer and the seller and authorize the independent third party to handle the details of the transfer. The escrow company must comply with Articles 273 to 308 of the Mexican Commercial Code in its dealings with its clients.
Why is escrow important? Why can’t the buyer just pay the seller directly?
Funds can be transferred directly from buyer to seller and, sometimes, they are. When strangers are doing business, however, they often feel more comfortable doing business through an independent third party. This is especially true when the completion of a transaction involves a lapse of time from beginning to end; such as when taxes and/or liens are to be paid from proceeds, title is to be searched and permits are to be obtained.
What is meant by “independent third party”?
The company holding the funds, the documents, executing the instructions, does not have a financial interest in the Mexico property involved in the transaction. It is not directly affected by the potential profits or losses or consequences of the purchase/sale and therefore can be more objective, more impartial, and follow more strictly the buyer-seller instructions.
What are the buyer/seller instructions? (also known as the settlement or disbursement contract)
It is a contract for the performance of services. What services and how and when they are performed are drawn from the terms established by the buyer and seller in their purchase/sale negotiations. It is a contract in which each party authorizes the release of funds and/or documents upon the occurrence of certain events or the completion of certain duties and tasks. It outlines the general conditions under which these instructions will be carried out.
Still have more questions swirling around inside your head? Fear not! Part 2 is sure to answer any further questions you have ever had about escrow or buying a Mexico property.
Now if you have any question about this or any of the TOP MEXICO REAL ESTATE properties we have listed in Playa Del Carmen, The Riviera Maya or anywhere throughout Mexico, please feel free to contact any of our TOP MEXICO EXPERT SALES TEAM and we will be glad to help you find your very own piece of paradise.
And remember, here at TOP MEXICO REAL ESTATE…
We make it happen!
TOPMexicoRealEstate.com NETWORK; “Mexico’s Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely!”