What is Escrow?
Escrow is a neutral third party that holds the money, documents, and instructions for a transaction until every condition of the sale is met. It protects both sides by ensuring no funds change hands and no deed transfers until the agreed terms are satisfied. In California, escrow or title companies handle this for most home sales.
Example: The buyer’s deposit and loan funds go into escrow; only when title is clear and all documents are signed does escrow release the money and record the deed.