Real estate glossary
Escrow
Also called: Escrow holder, Escrow period, Opening escrow
A neutral third party that holds the money and documents for a home sale and releases them only when every condition is met.
Escrow is a neutral middle step between buyer and seller. An escrow holder — an escrow company, title company or, in some states, an attorney — holds the buyer's deposit, collects signed documents and loan funds, and pays everyone at closing according to written instructions.
"Being in escrow" usually means the period between accepting an offer and closing, while inspections, appraisal, loan approval and paperwork are completed.
What it means for you as a seller
Escrow follows written instructions, not phone calls. Read and sign your escrow instructions promptly, and always verify wiring details by calling a known number — wire fraud often targets escrow.
Related terms
- Earnest money depositThe buyer's good-faith deposit, held by escrow and credited toward the price at closing.
- Close of escrowThe day the sale is complete: the deed is recorded, the buyer becomes the owner and the seller is paid.
- Preliminary title reportAn early report from the title company showing who owns the property and any liens, easements or other items affecting it.
Not legal or tax advice. These explanations are general information to help you follow your own transaction. Laws, forms and customs vary by state and county, and the terms of your own contract always control. For advice about your situation, talk to your real estate agent, a real estate attorney or a tax professional. Last updated .