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Would you give thousands of dollars to a stranger?
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Your ready to buy your piece of paradise, but handing money over to someone you don’t know in a foreign country is a scary proposition. So how do you protect yourself from a fraudulent situation?
Find out how to protect your good faith deposit.
Your ready to buy your piece of paradise, but handing money over to someone you don’t know in a foreign country is a scary proposition. So how do you protect yourself from a fraudulent situation?
Purchasing property in Mexico is a quite different process than in many other countries. And when it comes to handing over deposit money, many buyers make the mistake of leaving their good judgment at home; thinking this is Mexico and this is how business is done here.
Most of those trustworthy buyers have purchased without problem, but there is always a risk. In Mexico it is not necessary to have a license to sell real estate. So it is important to know who you are dealing with and how to protect your interests.
Escrow
Although not widely used in Mexico, escrow services are available through well know US companies and should be your first choice. There is a fee, but the protection it offers is well worth the extra expense.
Escrow is mostly used for re-sales but the property owner must be in agreement. This can sometimes be an obstacle as some Mexican owners do not understand the concept of escrow. In most cases the listing broker can convince the owner if it is properly presented.
Broker
This would be the next option only if the property owner will not accept escrow deposit. Either the listing broker or the buyer’s broker holds the deposit. This is more of a risk, so ask for references and DO CHECK THEM.
Developer
Most developers will not accept escrow deposits as they use incoming funds for construction. Deposits may be refundable or non-refundable (before the contract is signed) so do ask. It is important to work with a broker that you trust to present you with projects by developers with a proven track record.
The owner
It is customary for the initial deposit to go directly to the owner in the case of a re-sale. This is very risky and I do not recommend this situation. If unavoidable, do so in conjunction with your OWN attorney following his advice so he can make sure you are legally protected.
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Finance North America specializes in providing mortgage financing to U.S. citizens purchasing real estate in Mexico.
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