What Is Escrow?

Escrow is the safety mechanism at the center of a real estate closing. A neutral party — typically the title company — holds the earnest money, the purchase funds, and the signed documents until everything required is in place.

Once all conditions are satisfied — clear title, signed paperwork, funds wired — the escrow agent releases the money to the seller and records the deed to the buyer. Neither side has to trust the other directly.

This is why closing at a licensed title or escrow company matters so much. It ensures you actually get paid and the buyer actually gets clear title, with a neutral party enforcing the terms.