Quick Definition

Escrow is a financial arrangement where a third party holds and regulates payment of the funds required for two parties involved in a given transaction.

Examples

• 1In real estate, escrow is used to hold the buyer's deposit until the transaction is completed.
• 2During a large business acquisition, an escrow account may hold the funds until all contractual conditions are met.
• 3Online marketplaces use escrow services to hold payment until buyers confirm receipt and satisfaction of goods.
• 4Escrow accounts can also be used by homeowners to accumulate funds for property taxes and insurance.

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