What is Escrow?
In a real estate transaction, escrow is a legal arrangement in which a neutral third party (the escrow agent) holds funds until all agreed-upon conditions are met. In Mexico and Latin American countries, where payments are often made directly from buyer to seller, escrow provides essential protection, especially for foreigners.
The key components of a legitimate escrow service
Unlike in the U.S. or Canada, many Mexico & Latin American countries don't mandate escrow, but using a trusted escrow agent prevents risks like fund seizures or disputes.
Independence and Neutrality
Funds held in insured, segregated U.S. bank accounts, independent from interested parties and regulated by U.S. banking authorities. The agent should have no role in the real estate transaction other than holding and disbursing funds based on agreed conditions.
Regulation and Oversight
Incorporated and domiciled in the U.S. with audits by banking commissions. This prevents agents from disposing of funds freely, a common risk in unregulated Mexico & Latin American setups.
Insurance and Protection
Coverage for errors, omissions and cyber fraud — up to USD$1,000,000.0 per account in segregated, insured U.S. banks. Local "escrow" accounts often lack this, exposing your money to liens or seizures.
Conditions-Based Release
Funds disbursed only after clear title, inspections, and no-lien certificates or terms and conditions agreed by both buyer and seller.
Applicable in Mexico & Latin America
Ideal for restricted zones, pre-construction, or cross-border deals across the region as legal processes follow similar rules.
No Conflicts of Interest
Do not deposit your funds with agents who may have a vested interest in the transaction. In Mexico and Latin America, realtors, agencies, and attorneys representing either the buyer or the seller often offer some form of local "escrow" in their bank account that doesn't meet any legitimate escrow criteria.
Do you need to secure your property transaction?
Download our Escrow Agreement to see how we can protect your real estate transaction.