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Escrow is one of those real estate terms that feels confusing, but it’s simpler than it seems once it’s broken down.
What is escrow during a transaction?
It’s a neutral third party that holds important funds—like your earnest money—until both buyer and seller meet all the terms of the agreement.
Escrow after closing
Some lenders set up an escrow account to collect and pay:
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Property taxes
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Homeowners insurance
A portion of your monthly mortgage payment goes into this account.
Why escrow exists
Escrow protects both sides during the transaction and helps manage expenses after you move in.
Takeaway: Escrow creates a secure, neutral space for handling funds and important payments throughout the buying process.
If escrow feels confusing, I’m always happy to explain how it works in real time during a transaction.
