Learn the basics of escrow.
Escrow is a service that provides the public with a means of protection in the handling of funds and documents. Commonly used for real estate dealings, escrow is a neutral third party that helps one person transfer funds to another. In essence, escrow allows the buyer and seller to transact business with each other through another party, minimizing risk of loss.
How is it created?
An escrow is created when money and/or documents are deposited by two or more persons with a third party that are then to be delivered upon the happening of certain conditions. This ‘third party’ is the escrow agent or escrow holder. The funds are kept safe and secure until the mutual instructions are met.