When purchasing a home in a foreign country a potential home buyer will have many questions, one of them might be “how safe is the purchasing process?” or “how do I know I am actually going to receive this home after I have paid in full?”.
There is nothing wrong with having questions concerning the purchasing process or how the entire transaction is performed by all parties involved, but today we wanted to share with you an option for all potential home buyers, escrow.
First off, what is escrow? Escrow is defined as ‘a bond, deed, or other document kept in the custody of a third party, taking effect only when a specified condition has been fulfilled. A financial instrument held by a third party on behalf of the other two parties in a transaction.’’
How does escrow work? The funds are held by the escrow service until it receives the appropriate written or oral instructions or until obligations have been fulfilled. Securities, funds and other assets can be held in escrow.
An escrow account can be used in the sale of a house, for example. If there are conditions to the sale, such as the passing of an inspection, the buyer and seller may agree to use escrow. In this case, the buyer of the property will deposit the agreed payment amount (this can also be done in installments) in an escrow account held by a third party.
This assures the seller – in the process of allowing the house to be inspected – that the buyer is capable of making payment. Once all of the conditions concerning the sale are satisfied, the escrow transfers the payment to the seller, and Title Deed is transferred to the buyer. That’s the nutshell version.
Before considering using an escrow we suggest you talk to the real estate agent, a real estate lawyer and us of course! Sometimes a escrow will be suggested and other times not. We have your best interest in mind.
While living in Mexico I gained experience in dealing with real estate transactions where the buyers chose to use an escrow service so I am familiar in their operations from their cost and time frames to dealing with escrow agents. So I am here to answer any questions you may have.
When it comes to buying a piece of property overseas, escrow can offer the buyers a refuge of protection which can provide peace of mind. When it comes to peace of mind concerning buying property overseas, you can’t put a price tag on it.
Before you decide to relocate to the Caribbean we suggest doing a discovery trip, spending at least 1 month in the area you desire to purchase in and get to know the locals and the pros and cons first. It is also important to be educated about all of your options first before you make a decision concerning your future home.
We aim to provide value for you here on our blog, so please do not hesitate to reach out to us with any questions about Caribbean real estate or if you don’t know where to start.