You have decided to buy your beautiful slice of Mexico real estate. Well before you do there are three things that you need to now before diving in to the exciting, yet sometimes confusing, Mexico real estate market. What is an escrow? How does it work and why is it important in Mexico?
Escrow is simply defined as the deposit off funds, a deed or other instrument by one party for delivery to another party upon completion of a particular condition. When talking about the transfer of a title for Mexico real estate the escrow will include three parties the buyer, the seller, and an independent third party usually called the stakeholder.
The buyer and seller give instructions that are prepared by the escrow company in compliance with the terms of the purchase/sale contact. The documents are signed by the buyer and the seller and authorized by the stakeholder to handle the details of the transfer.
Funds can be transferred directly from buyer to seller however when strangers are doing business often both parties feel more comfortable doing business through an independent third party.
The stakeholder holds the funds, documents and executes the instructions but does not have a financial interest in the property involved in the transaction there for can be objective and impartial when flowing the buyers/sellers instructions.
The buyer/seller instructions also known as the settlement or disbursement contact, is a contract that includes what services, how and when they will be performed, like releasing of funds and documents upon completion of certain tasks as they are drawn up from the terms established by the buyer and seller in their purchase/sales negotiations.
The escrow procedure can be handled long-distance throw emails and courier service. The independent third party can be located anywhere in Mexico, however the buyer and seller does not need to appear before a notary public if they have authorized others to act in their behalf.
So the next time you are sitting there confuse about how to buy property in Mexico, remember it is not that difficult. Surround yourself with a knowledgeable real estate team to guild you throw the process. Your Caribbean dream home is waiting for you.