Wednesday, June 20, 2012
“I sent him the money for my house. He’s driving a brand new, top of the line SUV. He went on vacation to the Maldives. I’ve no idea what he spent the rest on. But I never got my house.
I thought this guy was straight as a die. But that was a big mistake”.
I met Bob in an airport waiting lounge. He was on his way back home after an unsuccessful attempt to track down his former attorney. Bob’s an independent guy. He likes to do things himself. So when he found a property overseas, he figured he’d take a look around town, find the attorneys that spoke English, and get a price from them to draw up his sale contract and do the due diligence on his new home. The attorney that gave Bob the best deal would win his business.
Bob found an attorney. He felt comfortable with him. He trusted him. So when it came to closing he wired the payment for his home to the attorney to pay the seller. He wired almost $200,000.
And the attorney promptly spent it on a luxury vacation, a new SUV, and a whole lot of fun…
“I’m not sure what I should have done differently” Bob commented. “After all, I needed to close. I didn’t know the seller. And I figured I couldn’t really show up at the airport with a suitcase full of cash”.
Thankfully, Bob’s story is rare. And, yes, he should have done things differently – by using an approved escrow account.
I’ve got personal experience of escrow accounts from First American Title Insurance. It costs a little money to set one of these escrow accounts up. But it gives you complete control over your funds.
You agree with the escrow agent when the seller gets paid. You decide what conditions the seller needs to meet before he gets paid. If he’s waiting on a permit…if he hasn’t paid monthly maintenance fees in more than a year…if the property has an outstanding debt like a mortgage – you can take care of all of that in the conditions the seller must meet before the escrow agent pays him. You can make the payment conditional on a favorable property survey or due diligence report from your attorney, the signing of the property deed, and the removal of anyone occupying the property.
In fact, you can add as many conditions as you want before the seller gets your money.
A good escrow account is the safest, easiest way to pay for an overseas property. As I mentioned, it costs a little money to set one up. But it’s worth every cent – especially if it saves you becoming another Bob.
And if you’d like some more tips on navigating your way through buying a property overseas – and not ending up like Bob - you can download our free guide here.