In real estate, escrow is the third-party handling of funds, documents, and tasks related to the sale of a home. If you are buying or selling a home, learn why you need escrow, who will be involved, and what your role will be.
How Escrow Works
Once your offer on a home or other real property has been accepted by the seller, your transaction is then placed into "escrow."
"Escrow" is a term that describes the neutral third-party handling of funds, documents, and tasks specific to the closing (or settlement, as it is also known), as outlined on the real estate purchase agreement or sales contract. The purpose of escrow is to facilitate the transaction by managing the disbursement of funds and documents.