Escrow accounts safeguard overseas property investors

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by Gill Montia

Overseas property investment specialist, PropertyInvestment.co.uk, is recommending that UK property investors use an escrow account when making a purchase abroad.

The account is similar to a stakeholder account and can be used to hold money safely while a sale is in progress.

A buyer can deposit money and/or documents in the account while waiting for the seller to deliver. The escrow agent will only releases the contents of the account when the release conditions, which are described in the escrow agreement, have been met.

Ewan McGarrie, chief executive of PropertyInvestment.co.uk explains: “This is where your money is held independently from the developer and this is something all investors, especially the more cautious ones, should always seek. That’s where your deposit money is held – therefore if the developer goes bankrupt, your money will be protected.”

Escrow account providers are widespread and regulated according to the requirements of their country of operation.

Most providers pay interest when money is held in the account for more than one calendar month. The interest will be paid to either the buyer or seller, as detailed in the agreement.