Escrow
Escrow is an arrangement in which a neutral third party holds money and documents while a transaction is completed.
Escrow is an arrangement in which a neutral third party holds money and documents while a transaction is completed. In a property purchase, the escrow company releases funds only when the agreed conditions are met.
Why it matters to a Las Vegas investor
In a Las Vegas purchase, escrow is where the deal is carried through to closing, so deadlines and deposits matter. Escrow also appears in a 1031 exchange, where a qualified party holds the sale proceeds instead of the investor.
Read more from Fernwood
- A Safer 1031 Exchange Process
- Potential 1031 Exchange Pitfalls to Avoid
- How to Find and Qualify an Investment Team
Related terms
Questions about Escrow
Is escrow the same as an escrow account for taxes and insurance?
The word is used for both. In a purchase, escrow is the neutral process that closes the sale. Some lenders also hold an escrow account to pay property taxes and insurance on a loan.
Who holds the funds in escrow?
A neutral escrow company or officer, not the buyer or the seller.