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Escrow
Think of escrow as the referee in the transaction — making sure the game is played fairly.
What you should know
Escrow is the neutral third-party process that holds money and documents until everyone has fulfilled their obligations. The title company (acting as escrow agent) holds earnest money and option fee deposits, handles all funds at closing, ensures lender requirements are satisfied, and disburses funds to the correct parties. Escrow protects both buyer and seller by making sure money and documents are only exchanged once everyone has met their commitments.