Escrow Services Are Essential in Cabo Real Estate

For many Mexican nationals, the idea of using a closing attorney or an escrow service in a real estate transaction can feel unnecessary or even confusing. In most parts of Mexico, real estate is handled very differently than it is in Cabo. Buyers and sellers often close directly with the notary and don’t need an attorney involved. Coming from Mexico City myself, I was shocked to see how different the process was when I first arrived in Cabo.

The difference is largely due to the international nature of Cabo’s market. Many of the sellers here are Americans or Canadians, and their properties are often held in fideicomisos (bank trusts). That adds a layer of complexity that requires a closing attorney to properly manage the process. When Mexican buyers come into this market for the first time, they may not understand why attorneys or escrow are needed. That’s why we often set up calls to explain how it works—and once it’s laid out clearly, clients usually see the value right away.

Escrow services are another big adjustment. In most of Mexico, escrow accounts simply aren’t part of the real estate process. At best, you’ll find them in areas like the Riviera Maya, but even there they’re not the norm. Escrow is seen as a very American and Canadian practice. However, in Cabo, we strongly advise using it in every transaction—whether it’s between foreigners or between two Mexican nationals—because it adds an extra layer of security.

An escrow account works as a neutral holding place for the money during the transaction. The funds are released only once all the agreed conditions are met, which protects both buyer and seller. Even if it weren’t a requirement under the MLS rules here in Los Cabos, we would still recommend it. It creates confidence on both sides and ensures that the transaction moves forward smoothly and safely.

Adapting to this system may feel strange at first for Mexican nationals who are used to handling closings differently, but it’s an important step. Escrow and closing attorneys provide a solid foundation of trust and security in Cabo’s unique real estate market, especially given the international mix of buyers and sellers.

Alejandro Donnadieu – alejandro@caborealestate.com

Mariana Plowes - mph@bajalegalgroup.com