What is Escrow

noun a bond, deed, or other document kept in the custody of a third party and taking effect only when a specified condition has been fulfilled.
verb place in custody or trust until a specified condition has been fulfilled."those funds are escrowed for the purpose of improving municipal services"

What does escrow mean in simple terms?

What Is Escrow? Escrow is a legal arrangement in which a third party temporarily holds money or property until a particular condition has been met (such as the fulfillment of a purchase agreement).

What is an example of escrow?

Example of Escrow\n\n At the closing, John agrees to set up an escrow account with the lender to pay property taxes and homeowners insurance. John's monthly payments look like this: $1,000 for principal and interest. $100 for homeowners insurance.

What does it mean to go to escrow?

Escrow occurs when two parties are engaged in a transaction, with a third party supporting that transaction. The word escrow implies a relevant asset is placed in custody until all conditions of the contract are met. For our purposes, there are three parties involved in this contract: The seller of the home.

Is escrow safe for buyers?

Legitimate escrow services are supposed to protect buyers from fraudulent activity and can be useful for people making purchases made over the Internet or at long distances. Escrow services usually hold the buyer's money until he or she receives the purchased item and verifies that its condition is as promised.