In one sentence
The neutral party holding funds or documents and releasing them only when agreed conditions are met.
The longer version
The escrow agent, often the title company, holds the closing's funds and signature pages and releases them per the escrow instructions. Neutrality is the point: no party can move the money unilaterally.
Clear release conditions are what keep an escrow from becoming a standoff, and the escrow instructions are a closing document in their own right.
Common questions
- What does an escrow agent do?
- Holds funds or documents as a neutral party and releases them only when the conditions in the written escrow instructions are met.
- Who acts as escrow agent in commercial deals?
- Usually the title company, sometimes an attorney or a bank, depending on the deal and local practice.
- Can an escrow agent release funds early?
- Not without the parties' written authorization. The agent follows the instructions strictly, which is what makes escrow trustworthy.
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