who should hold the purchase money and why

Please understand that not all escrows are created equal.  Each escrow can be written according to the agreement between the three parties; Buyer, Seller and Escrow Company.  Always read your documents before you blindly deposit money into any account.  Many companies represent that they are putting funds into an escrow account but unless you sign specific escrow instructions, please know that your funds are not going into an escrow account.

Escrow exists in Mexico to act as the neutral third party to give both the Buyer and Seller confidence that they are putting money into an escrow according to a signed agreement.  At the end of the transaction the funds will be disbursed from the account according to the disbursement instructions that the Buyer and Seller must sign.  

On a resale transaction, Escrow is very valuable because the buyer does not have to give funds directly to the Real Estate Agent, the Real Estate Broker or the Seller.  Instead, the parties agree to the terms of the Escrow Instructions and deposit their money with the neutral third party, the Escrow.  Once the terms of the instructions are met, the Escrow Officer will disburse the funds according to the signed disbursement instructions which they are provided.

With developer transactions, the developer may structure the escrow to disburse the funds; immediately, over a period of time (with or without fund control) or wait and disburse all of the funds on the day of the closing and transfer of rights before the Notario.  Please read these documents carefully so that you are aware of what type of escrow you are getting involved with. 

In addition, we would NOT recommend that you escrow your money with anyone other than a Title Insurance Company.  Today there are only three Title Insurance Companies that provide these services; Fidelity Title, First American Title and Stewart Title.  If you deposit your funds with anyone other than these companies you are at risk of losing your funds.

Contact our closing attorneys today to guarantee that your escrow account is setup properly.