Finance
What is Escrow?
Escrow is when a trusted third party holds money or assets during a transaction until both sides meet their conditions. It protects buyers and sellers — for example, holding a home buyer's funds until the sale legally completes.
See it, don’t just read it.
Watch a 2-minute lesson with voice + animation that explains escrow.
Key things to understand
- 1A neutral third party holds funds or assets.
- 2It's released only when conditions are met.
- 3It protects both buyer and seller.
- 4It's common in real estate and online deals.
Frequently asked questions
- What is escrow?
- An arrangement where a neutral third party holds money or assets until both sides of a deal meet their terms.
- How does escrow protect buyers and sellers?
- Funds are only released when agreed conditions are met, so neither side risks paying or delivering early.
- Where is escrow commonly used?
- In real estate purchases, large online transactions, and mergers.