what is an escrow company

An escrow company is a neutral third party that holds funds and documents related to a financial transaction until specified conditions are met. The purpose of an escrow company is to ensure that both parties in a transaction can fulfill their obligations, and to protect the earnest money invested in the process to show that the buyer is truly interested in purchasing the property. The escrow company holds the funds and documents as the seller and buyer negotiate the contract and sign disclosures. The escrow process involves collecting the required funds and documents involved in the closing process, including the initial earnest money check, loan documents, and signed deed. The escrow account is managed by an outside party, such as a title company that specializes in real estate, a bank or other financial institution, or a private individual entrusted with the role. The escrow company is responsible for overseeing any legal documents and funds related to the closing process. An escrow agreement is the terms and conditions in a contract between the parties that are involved and the responsibilities they hold. Escrow companies are commonly used in the transfer of high-value personal and business property, like websites and businesses, and in the completion of person-to-person remote auctions.