Escrow services is a legal concept in which a financial instrument or an asset is held by a third party on behalf of two other parties that are in the process of completing a transaction. The funds or assets are held in escrow, until we receive the appropriate instructions or until predetermined contractual obligations have been fulfilled. Money, securities, funds and other assets can all be held in escrow. This ensures that all parties in the transaction are protected.

For example, let’s say you are buying a house in Mexico. You might use escrow services to ensure that the seller delivers the deed to the property to you, and that the funds for the purchase are transferred to the seller. In this case, the escrow agent would hold the deed to the property until you have paid the full purchase price, at which point they would transfer ownership of the property to you.

Similarly, if you were selling your house in Mexico, you might use escrow services to ensure that the buyer delivers the purchase price to you before you transfer ownership of the house. In this case, the escrow would hold the funds from the sale until you have delivered the deed to them, at which point they would release the funds to you.


Escrow accounts are used in real estate transactions so that the buyer and notary can perform due diligence on a potential acquisition while assuring the seller of his capacity to close on the purchase. For example, an escrow account can be used for the sale of a house. If there are conditions to the sale, such as clean title, certificate of no liens and inspections, the buyer and seller should agree to use escrow.

Escrow services in Mexico are provided by law firms, and they usually charge a percentage of the total transaction value as their fee. The escrow account allows the buyer to deposit funds, which will only be released to the seller once all the conditions of the sale have been met. This provides security for both parties and helps to ensure that the transaction is completed smoothly.

Escrow services are provided by law firms or other financial institutions in Mexico, and they can help to ensure that property transactions are completed smoothly and efficiently.

In Mexico, escrow services are not available like they are in North America. This means that if you are working with a Mexican lawyer, Notary or real estate agent, they will likely hold your funds in their personal bank account. Although they may have good intentions, this exposes your funds to seizure or liens from their creditors or the Mexican tax authorities (SAT). 

It is important to be aware of this before doing business in Mexico so that you can protect yourself accordingly.  The ideal, work with a LawInCabo in La Paz that can provide escrow services and ensure that your funds are safe and protected. The Escrow helps the builder stay on budget, complete all conditions. Funds held in Escrow services also protects the buyer/owner by guaranteeing that the construction company does not use their money inappropriately.

The use of escrow services in Mexico is relatively new, and until recently was not commonly accepted by real estate professionals.  In recent years, brokers and agents have seen the benefits of using escrow. The use of escrow motivates both the buyer and seller to move efficiently through the closing process.

Furthermore, brokers and agents know that when a deal closes, their clients will get the deal they agreed to, and importantly, the agents will get their fees.  Prior to the use of escrow, brokers and agents had real risks of non-payment when funds went directly from the buyer to the seller.

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