What is Escrow?

Do you need an asset (often money, art, a deed of a title, property; or intellectual property such as a software source, or a website) delivered securely, using a third party? Escrow is a legal arrangement where these assets are held in trust, with an escrow agent waiting a fulfillment of one or two conditions, such as payment of a purchase price. Once the condition has been met, the Escrow agent will deliver the asset to the proper recipient. If the asset is not delivered, the escrow agent is bound to the safe keeping of the asset.

Many times the escrow agent constitutes a distinct and specialized profession along with its own training and certification requirements. In some parts of the world this function may be performed by attorneys and not by an escrow agent. Either way, the escrow process is covered by significant regulation and protection through the use of licensing and/or bonding.

The field where escrow is used the most is real estate transactions. In the event that there is a change in the ownership of a home or property, the transfer of the property title from one hand to the other will be done through an escrow agent. Likewise the buyer will either transfer funds or give bank transfer mortgage proceeds to the escrow agent. Only when all the conditions of the purchase agreement are met will the escrow agent hand over the property title to the purchaser and will distribute the funds to the seller.

Let's say that you want to make a transaction from a geographically remote part of the world? Escrow has gone digital with the assistance of the internet. Through the use of the internet buyers and sellers can purchase and sell goods and services from each other from almost anywhere. However conducting large transactions over the internet is risky and subject to fraud. The online escrow services have helped in combating this problem and allow for more secure transfers.  When using these services online you must always proceed with caution and verify that the services that you are about to use are legitimate.