What does in Eskro mean, when someone is purchasing a home?
Answer:
Escrow
An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. For example, the deposit by a borrower with the lender of funds to pay taxes and insurance premiums when they become due, or the deposit of funds or documents with an attorney or escrow agent to be disbursed upon the closing of a sale of real estate.
Short answer. The good faith deposit made by a buyer to assure the seller that they have a legitamate offer and interest in completing the sale and purchase of a property.
I believe it's escrow and it means that you give the money to a third party to hang on to. Then once you get posession of the home, you authorize the escrow service to release the funds to the seller. That way you don't have to give up the money until you are comfortable that you are getting what you paid for and the seller can be confident that once he/she signs over the home to you, he/she will get paid.
Escrow is a legal arrangement whereby an asset (often money, but sometimes other property such as art, a deed of title, website, or software source code) is delivered to a third party (called an escrow agent) to be held in trust or otherwise pending a contingency or the fulfillment of a condition or conditions in a contract. Upon that event occurring, the escrow agent will deliver the asset to the proper recipient, otherwise the escrow agent is bound by his or her fiduciary duty to maintain the escrow account.
Not all escrow agreements impose the duties of a legal trustee on the escrow agent, and, in fact, in many such agreements, escrow agents are held to a mere gross negligence standard and benefit from indemnity and hold harmless provisions.
While escrow is best known in the context of real estate (specifically in mortgages where the mortgage company will establish an escrow account to pay property tax and insurance during the term of the mortgage), escrow companies are also commonly used in the transfer of high value personal and business property, like websites and businesses, and in relation to person-to-person remote auctions (such as eBay).
Escrow is also known in the judicial context. So called escrow funds are commonly used to distribute the money after a cash settlement in a class action or environmental enforcement action. This way the defendant is not responsible for the distribution of judgment monies to the individual plaintiffs or the court-determined use (such as environmental remediation or mitigation). Defendant pays the total amount of the judgment (or settlement) to the court-administered or -appointed escrow fund, and the fund distributes the funds (often reimbursing its expenses from such the judgment funds).
In some jurisdictions, real estate brokers are considered to act as escrow agents when they accept deposits or earnest money for the purchase of real property. In many jurisdictions, the duties of such agents are codified.
Source code escrow agents hold source code of software in escrow just as other escrow companies hold cash. The highly valuable (and often secret) source code is only released by the agent to either party upon specific terms of the escrow agreement.
Escrow is also used in the field of Banking Equipment (such as Automatic Teller Machines - ATMs) and is the function which allows the machine to hold the money deposited by the customer separately, and in case he challenges the counting result his money is returned.
Sincerely,
Vladimir Rozumniy
Sr. Vice President/Managing Director
American Mortgage & Real Estate Group
8159 Santa Monica Blvd Ste., 201
West Hollywood, CA 90046
Direct (323) 428-5944
Fax (323) 331-1538
Email: info@amregroup.com
Website: http://www.amregroup.com
The answers post by the user, for information only, BAnswer.com does not guarantee the right.
Other Questions and Answers: