If you have found a property and want to make an offer, buyers should know about escrow and deposits in Mexico.
Your offer should include time for you to conduct due diligence, have the home inspected and attend to other concerns. Beware of having to put your deposit into the escrow company before these issues are resolved.
Mexico does not require funds to be put up by the buyer in order to have a binding offer. In fact, the country does not require escrow. But for you, as a foreign buyer, these two issues are important to understand for your safety.
You can put your escrow deposit into the title company once you have accepted the results of your due diligence. Don’t be convinced to do otherwise by an agent who doesn´t know the facts. This might be a way to get you to comply faster, but you do not need to send money in advance of diligence on your behalf.
If you withdraw from the offer, then you don´t have to fight to get your funds back from the escrow. Because you did not deposit them, you accept the inspection results and legal review. Many times, the title company may require your signature and the sellers. This is to protect their company from legal issues, but it may take a lot of time and the procedures are not the same as you would expect.
You send the second deposit, or the balance of the purchase price, into the escrow company several days ahead of closing.
Title insurance will be offered, so you have to decide if you want to pay for this. Insurance is not required for a purchase, or for a mortgage. It is optional. Be sure to check with your attorney or notary if there are issues that warrant insurance. Some of the reasons to buy title insurance are: 1) the property is adjoining the federal maritime zone, 2) the purchase price is over US$1 million or, 3) research discovers the property has had problems in the past.
You should ask your agent how the process is different from your home country. Some may let you assume procedures that do not exist in Mexico real estate, so make sure you find an experienced agent with the credentials and experience you can trust.
This article is based upon legal opinions, current practices and my personal experiences in the Puerto Vallarta-Bahia de Banderas areas. I recommend that each potential buyer or seller conduct his/her own due diligence and review.
