Money or documents, such as a deed or title, held by a third party until the conditions of an agreement are met. For instance, pending the completion of a real estate transaction, the deed to the property will be held “in escrow.”
Once the contractual condition has been met and approved by both parties, the escrow agent who has the documents, assets, or money shall hand them over to the intended beneficiary.
The escrow agreement contains the instructions which are often constructed by the escrow agent.
The escrow system is usually applied in real estate transactions; between a buyer and seller of a real estate property. Here, the escrow agent holds on to the money meant for the payment of the property. This escrow system allows the seller to inspect the property as requested by the buyer. After the conditions for purchase has been confirmed by the buyer, the escrow agent will then release the money to the buyer.
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