An escrow account in a real estate transaction is a safe way to protect yourself and to make sure you will get what you bought.
Escrow, like title insurance, is a very new service in Mexico. Most transactions here in the past were cash transactions in which they hand over the title and you hand over the cash.
Well, we all wish that every real estate transaction was that easy but as we all know they are not. Escrow is a necessary service to help insure that all parties in the transaction meet their obligations in order to complete the transaction according to the written contract.
We recommend that escrow is used whenever possible, even when the agent or developer says it isn't necessary. We recommend that you use either First American Title or Stewart Title as your escrow company. First American Title and Stewart Title are United States companies and are governed by United States regulations. Make sure that your check to open escrow is made out only to either of these two names. Some agents are advising clients to use a local attorney as the escrowing party. We do not recommend that.
We have had situations with trusted developments where escrow is not used but that always has to be your choice. All real estate transactions come with a certain amount of risk and it is our job to minimize that risk for you.
Some developments will require that you release funds to them immediately, in which case escrow would not be used. There is also fund control which would release money from escrow when certain milestones are met by either party. In either of these cases we would recommend that you do your homework on the developers and also talk to a professional real estate company about their recommendation before you write any checks