What is Escrow?
A definition of Escrow
“Escrow is a financial arrangement where a third party holds and regulates payment of funds required for two parties involved in a transaction.”
Business Glossary > What is Escrow?
Examples of Escrow in a Sentence:
The real estate agent suggested using an escrow service for the transaction.
Funds were held in escrow until the contract terms were fulfilled.
Using escrow can protect both the buyer and seller in a deal.
Why is Escrow Important in Business?
Escrow is important because it protects buyers and sellers in a transaction by safeguarding funds or assets until predetermined contractual obligations are met. This minimizes potential risks and builds trust between parties.
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Associated Terms
Here are some associated business terms and synonyms for “Escrow”:
- Trust Account
- Custodial Account
- Controlled Account
Amazon and Escrow
Amazon sometimes uses escrow services to ensure that payment is made to third-party sellers only after the buyer has received and is satisfied with their purchase. This reduces the risk for both parties in online transactions.
Final Notes on Escrow
When using escrow, consider the terms of the service, the reputation of the escrow agent, and the costs involved. Ensuring clarity on these aspects can lead to a smooth and secure transaction process.
This has been a definition of Escrow meaning.
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