What does the term "escrow" mean?

The term "escrow" specifically refers to the holding of funds by a neutral third party until the terms of an agreement are fulfilled, which makes the provided answer accurate. In real estate transactions, escrow is an essential process that helps protect both the buyer and seller. When the buyer makes an offer on a property, they typically deposit earnest money into an escrow account managed by an impartial third party, such as an escrow company or a title agent. This ensures that the funds are securely held and will only be released to the seller once all contractual obligations have been met, such as completing repairs or conducting inspections.

This process helps to ensure that both parties adhere to the terms of the contract and provides confidence that the buyer's money is not at risk of being misused. Additionally, the escrow holder acts as an intermediary, ensuring that all documents and funds required for the closing process are properly handled before the transaction is finalized.

Understanding this process is crucial for title agents and anyone involved in real estate transactions in Ohio and beyond, as it highlights the importance of neutrality and integrity in real estate dealings.