Escrow Basics: What Exactly IS Escrow?

Escrow Basics: What Exactly IS Escrow?

According to Merriam-Webster, escrow is defined as: a deed, a bond, money, or a piece of property held in trust by a third party to be turned over to the grantee only upon fulfillment of a condition.

Whether it is the buying and selling of a home, or the transfer of a business, the amount of legal documentation and financial liabilities can easily create confusion or differences of opinion amongst the buyer, seller and/or their representatives. This is why an impartial, third-party representative becomes essential to focusing on the facts and responsibilities that must be fulfilled.

With so many parties obligated to fulfill so many responsibilities in any given real estate transaction, it quickly becomes apparent why a neutral third party (escrow) is essential to a smooth process.

Escrow is the one who facilitates (just to name a few):

  • drawing of escrow instructions which reflect the negotiated points of the contract and act as basis for execution of the property transfer.
  • confirmation of clear title from the Title Company
  • the recording the deed with the County Office
  • filing paperwork with the proper municipalities
  • the receiving of wires and funds to be disbursed

In addition to the above responsibilities, American Trust Escrow views our most valuable function as acting as a personal liaison and resource for Realtors, buyers and sellers as they tread through the complicated and often technical world of buying and selling real estate.

Interested in what you are reading? To automatically receive these Escrow Tips in your email box, subscribe to these articles at the top right corner of this site ( in the box titled “Subscribe via Email”.

Become a fan of American Trust Escrow on Facebook and follow us on Twitter.