Escrow

Escrow

Generally, a person or company that holds money or other property on behalf of other people who each have an interest in or claim to the property.  Real estate transactions require escrow because of the many parties (buyer, seller, lender, title insurance) and the many moving parts.

Escrow does a lot: it holds the buyer’s earnest money and, when closing is near, the balance of the purchase funds (usually from the buyer and from a lender); it prepares the deed and all other documents needed to close the transaction; it makes sure the lender’s documents are executed and recorded; it records the deed and accounts for all funds, disbursing the proceeds to the seller; and otherwise it makes sure the terms of the Purchase and Sale Agreement are given effect.

The person who actually provides the escrow services is the Closing Agent.