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Escrow Companies Explained for Real Estate Novices

The word escrow is pretty common in real estate terminology. However, it can confuse people who aren't well versed in real estate jargon. Watching What Is Escrow?-What Is An Escrow Company is an excellent idea for anyone hoping to understand it better. The video answers some of the standard real estate questions that people generally have. Essentially, escrow refers to the process in which a third party is involved in a real estate transaction.


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Sometimes certain restrictions or conditions must be met before a real estate transaction is finalized. The neutral third party acts as the security and ensures all conditions are met. Buyers and sellers often agree on the escrow companies they wish to work with. Escrow companies will mostly hold the money or the documents until the deal is final. They are crucial in ensuring that the transactions are legal and legitimate. It provides both parties peace of mind knowing that their contributions to the transaction are in safe hands. Buyers don't need to worry about sellers withholding documents after paying for a property. Sellers will also not experience a total loss if the buyer develops cold feet. There is a percentage that they will receive from the escrow. When real estate transactions go through an escrow, both parties are happy at the end of it all.