In real estate transactions, Escrow refers to a neutral third party that holds funds, documents, and other instruments necessary to complete a sale. The escrow holder acts according to written instructions provided by the buyer, seller, and lender, ensuring that all conditions of the transaction are met before funds and title are transferred.
Escrow protects all parties by preventing any one party from controlling the transaction unilaterally. Once all contractual requirements have been satisfied, the escrow agent disburses funds, records documents, and completes the closing in accordance with the agreed upon instructions.
