[n. es-kroh, i-skroh; v. i-skroh, es-kroh] 
Law.| 1. | a contract, deed, bond, or other written agreement deposited with a third person, by whom it is to be delivered to the grantee or promisee on the fulfillment of some condition. |
| 2. | to place in escrow: The home seller agrees to escrow the sum of $1000 with his attorney. |
| 3. | in escrow, in the keeping of a third person for delivery to a given party upon the fulfillment of some condition. |
| es·crow (ěs'krō', ě-skrō') n. Money, property, a deed, or a bond put into the custody of a third party for delivery to a grantee only after the fulfillment of the conditions specified. tr.v. es·crowed, es·crow·ing, es·crows To place in escrow. [Anglo-Norman escrowe, variant of Old French escroe, scroll; see scroll.] |
The condition of being ineffective until certain conditions are met. For example, money inherited by a minor might be held in escrow until the heir reaches a certain age. Homeowners with mortgages frequently pay money for insurance and taxes on their home into an escrow account each month. The holder of the mortgage then pays the insurance and tax bills out of the escrow account when the bills are due.
Escrow
A financial instrument held by a third party on behalf of the other two parties in a transaction. The funds are held by the escrow service until it receives the appropriate written or oral instructions or until obligations have been fulfilled. Securities, funds and other assets can be held in escrow.
Investopedia Commentary
An escrow account can be used in the sale of a house, for example. If there are conditions to the sale, such as the passing of an inspection, the buyer and seller may agree to use escrow. In this case, the buyer of the property will deposit the payment amount for the house in an escrow account held by a third party. This assures the seller - in the process of allowing the house to be inspected - that the buyer is capable of making payment. Once all of the conditions to the sale are satisfied, the escrow transfers the payment to the seller, and title is transferred to the buyer.
Related Links
Understanding the Mortgage Payment Structure
See also: Closing, Escrow Agreement, Payee, Payer, Trustee
escrow
escrow security
An arrangement where something (generally money or documents) is held in trust ("in escrow") by a trusted third party until certain agreed conditions are met. In computing the term is used for key escrow and also for source code escrow.
(1999-12-14)
kroʊ
