Esta publicación también está disponible en: Español (Spanish)
When buying any kind of product , it is expected from the buyer to make inquires before paying for that product. A smart buyer usually makes informed decisions and making these informed decisions is required specially when buying a property due to the value of real estate. Moreover, if you are buying property in Mexico, you have to be even more cautious about making an informed decision. Over here you should always do your homework in terms of gathering enough information on the property before making any kind of payment, including a down payment to the seller or an initial deposit to an escrow company, and also including a down payment to the Notary for the closing costs.
So what can happen if I put a deposit on escrow or give a down payment before doing my homework?
Representations from the seller stated in a documented offer do not guarantee that the seller is free to transfer title or that the property is free of any leans or encumbrances. If you rely only on these representations, you could later have a not so pleasant surprise. There are several aspects that can complicate (and sometimes totally impede) the closing process, such as: (i) the legal capacity of the seller to transfer title, (ii) liens or encumbrances on the property, (iii) any otstanding balance on the property tax. This is why you should always conduct a title verification or a legal audit on the property before putting any money down, otherwise you can lose that money.
Don’t depend on the kindness of strangers…
If you’ve made a down payment (either for the price of the property or for closing costs) and for any reason you decide to cancel the purchase, it will be very hard to get that money back, mainly because you will depend on the good will of the seller. This is why before making any payment, you shouldn’t forget to do your homework and then you will be making an A+ purchase.