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Escrow Company Services in Mexican Real Estate Sales
Harriet Murray - PV Mirror
June 28, 2011
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Escrow Company Services in Mexican Real Estate Sales
Puerto Vallarta, Mexico - Escrow companies in Mexico are not title companies. The buyer has a choice of depositing the purchase price with Mexican or US escrow companies for safe holding. The scope of what these companies do is often misunderstood by foreign buyers and sellers.

Points to remember:

1. Escrow is not required in Mexico. It has to be requested and negotiated in some cases. We can’t assume everyone handles purchase funds in this manner. Some sellers want deposits and funds paid directly to them and not through third parties.

2. Funds of a client should not be put into a third party (individual, company or real estate agent’s account) who is not registered properly for escrow.

3. Title companies from the US which offer escrow services, offer an option of title insurance to the buyer.

4. Escrow companies in Mexico can keep funds in US, Canadian dollars, or Mexican pesos. Title insurance is not a product
offered by Mexican companies for real estate.

5. Escrow agreements are not part of the sales contract. Sometimes, escrow companies will agree to a limited amount of changes to their standard agreement to address an issue in a sales contract, but it is not common.

6. The escrow company is not a settlement agent. It does not handle the payment of utilities, taxes, the condo fee letter, or any other details of closing.

7. The real estate agents and sometimes attorneys for the buyer and seller, handle the settlement, working with the notary to account for funds needed by the buyer and seller and to prorate, collect and pay outstanding bills which the
principals expect to have paid. This part of the job for the real estate agent is in addition to what they normally do in the US or Canada.

8. Before escrow companies will disburse, they have their own particular set of requirements and procedures. If you become frustrated with the requirements, remember that international transactions as well as domestic now have rules to
prove the funds are not laundered or drug related, and actual property is being purchased.

9. Documents which the Escrow Holder can require before funding the purchase price to the seller may include:
• A copy of the fully executed real estate contact. (The escrow contract has already been signed and accepted by the parties before earnest money is sent.)
• Copies of valid, government-issued identification and signatures of the parties to the transaction.
• A disbursement instruction letter signed by the parties in an acceptable form to the Escrow Holder.
• A copy of the trust signed by the Seller at the closing in Mexico.
• A letter from the licensed notary handling the transaction that the Deed/trust have been fully executed.
• A certificate of no liens.
• A preventive notice referencing the Property. This notice is to give notice through the public registry that this property is being sold to the party named. The purpose is to prevent the property being registered with more than one
purchaser before the transaction is totally recorded at the public registry.

I recommend you use escrow companies to be prudent. It is a risk to do otherwise. You need to decide if you want to take the risk.

+ Wexico

This article is based upon legal opinions, current practices and my personal experiences in the Puerto Vallarta-Bahía de Banderas areas. I recommend that each potential buyer or seller of Mexican real estate conduct his own due diligence and review. Harriet Murray can be contacted via

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