Be Sure The One You Use Is Legitimate!
BY LINDA JONES NEIL
Recently, a buyer of a property in La Paz was told by the agent supervising the transfer of title to deposit her payment, over 300,000 USD, into his personal bank account. The agent is an assistant to a local notary public.
Something else happened not so long ago: another buyer deposited $275,000 USD with a local attorney, as payment for his property. The attorney took off for the weekend to Monaco. The attorney came back and, guess what? The entire 275K has disappeared!!
What is going on here? This is NOT the Wild West!!
Since 1991 the buyers and sellers of property in Baja California Sur have had access to legitimate escrow accounts for their real estate transactions. These accounts are also known as custodial accounts, trust accounts or escrow accounts… In other words, they are managed by responsible third parties. Funds are held in US and/or Mexican banks to protect the interests of both buyers and sellers!
It is a rule of MLS BCS for ALL purchase funds to be deposited into legitimate escrow or custodial accounts. Violators receive stiff fines!
What Makes An Escrow, A Trust Account, A Custodial Account, Legitimate?
The Bank… Funds should be deposited into a legitimate and well-known US or Mexican bank. The account should be in the name of the company holding the funds and should probably have been in existence for a lengthy period as an account under the company name. If in the US, it should be an FDIC-insured account. If you are concerned, call the bank, and check out the holder of the account!
The Escrow Or Settlement Instructions. This is key to the legitimacy of the account. You, as buyer or seller, must provide written instructions as to the use of this money you are depositing. That it is to be paid in certain amounts and under certain conditions. If there are no written or signed instructions, there is no proof that the funds are yours! And no proof as to how funds are to be used!
An additional danger is If funds are deposited without signed and written instructions, the Mexican tax authorities may confiscate the funds for lack of tax payments or confusion about who owns the funds!
The Reputation of The Company. Who are these people who are holding your funds? Have they been in business for a while? Do they appear to be professional? If you are not sure, be sure to check them out!
Follow the rules for deposits. The legitimate companies will have rules regarding the manner of depositing funds. This may involve a telephone call, a text message when the deposit is made, or something more. Be sure to follow these rules. They are designed to protect your funds. If you do not understand them, ask!
Life is too short to risk important funds, be safe and follow the rules for deposits. Protect your investment!
