INVESTOR DICTIONARY: ESCROW, WHAT IT IS AND HOW IT WORKS

When we talk about real estate issues, many terms come to mind that are frequently used in real estate. Certain words create confusion and They need to be resolved quickly for anyone who does not understand or know their meaning.

Normally foreign investors follow a purchase process that allows them allows you to acquire properties in Mexico in a complex but safe way: the ESCROW. It is a term widely used in investments due to its safe and reliable nature. A lot People at this point may ask what is escrow and how does it work? Well Well, broadly speaking, escrow is a mechanism used in a sale to ensure that payment reaches the seller and that the product reaches the buyer.

Its method of operation is as follows: An escrow account has a operation similar to escrow. This account is opened through an entity financial The main difference with the trust is the ownership of the goods. In a trust, the assets are transferred to the trustee and the trust entity itself manages, in the escrow account the ownership of the account is maintained, however, the holder cannot make movements in the account. The settlor takes the account and is is created for a specific purpose, we could say that it is a bank trust where there is no transfer of assets and goods but it is handled by the financial institution who is in charge of the account (without losing ownership of the generator) and finally the funds are delivered to the beneficiary according to the specifications that have been placed in the escrow contract.

This type of account is very easy to implement and also represents a guarantee when there are transactions, not only financial but also commercial. Are from very common use, efficient and flawlessly meet the objective for which were created.


Today this method of purchase is widely used and most entities Finance companies have a department for these operations.