What is Escrow for Real Estate?

No matter whatever you are selling or buying, you will come face to face with the term escrow. EscrowIn terms of real estate, escrow has several meanings, but in short, escrow is when a third party during a real estate transaction, holds on to something of value.

Escrow and Offers:-

When you make an offer for a property, you make an earnest check, and that amount in check is saved in escrow. A third party holds that amount in escrow and you along with the seller does not have access to that amount unless both parties agree to the final terms.

Putting the payment in escrow is safe as it protects both parties. For example, you have made the early payment to seller’s account and somehow the negotiations between you and the seller end, this way you will not want seller holding your money. Likewise, the seller will not want to sign the final document, unless he/she has a guarantee of payment from the buyer.

Escrow and Closing:-

You may have listened the term “escrow closing”, this is when you complete your purchase. All the escrow process is taken care by the escrow officer. Sometimes, other than escrow officer, an attorney ensure the process of escrow.

Why you need an escrow?

Whether you are a lender, borrower, sender or buyer, you want to make sure that all the funds remain safe until all the instructions of the transaction have been followed. Therefore, to make sure the safety of funds, every person involved in a transaction needs escrow.


In this modern day real estate market, you need to keep yourself away from scams and frauds. To make sure the safety of your funds, escrow is the best option for you. I hope that after reading this guide, you will be able to learn all the ins and outs of escrow and why you need an escrow.

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