What is it?
As if the terminology in real estate wasn’t confusing enough already, escrow can actually have multiple meanings. Many people are familiar with an escrow impound account, where reserves are held in order to pay certain costs of owning a home (or as otherwise required by a bank), such as property taxes or HOA dues.
During the transaction, however, escrow is generally referred to as the company handling the fiscal duties of the transaction. The escrow company holds deposits (such as earnest money), pays off seller liens, and disburses the money according to the contract agreed to between the parties.
Watch Out for Wire Fraud!
Wire fraud is rampant in real estate transactions, and often occurs when bad actors present themselves as the escrow company to trick buyers or sellers into sending them money. If you are using a wire transfer, always get the instructions from your escrow officer by calling them directly on the phone. DO NOT EVER USE WIRE INSTRUCTIONS RECEIVED VIA EMAIL!