Escrow

Escrow refers to a financial arrangement in which a third party temporarily holds Money or property until certain conditions are met. This process helps to ensure security and Trust between parties involved in a transaction.

In real estate transactions, for instance, the buyer’s deposit is placed in escrow to be held by a neutral party until the sale is finalized. If the deal goes through, the funds are reLeased to the seller. If it falls through, the buyer may get their deposit back, depending on the terms of the escrow agreement.

Another example is in online purchases, where escrow services hold the buyer’s payment until they receive the item and are satisfied with it. If there is a dispute, the escrow service can mediate and determine how the funds should be distributed.

In legal cases, escrow can be used to hold settlement funds until both parties fulfill their obligations, ensuring that neither party can access the funds prematurely.