What does “in escrow” mean?

“In escrow” refers to a financial arrangement in which a third party temporarily holds funds or assets until certain conditions are met or a transaction is completed. This term is commonly used in real estate transactions, where buyer funds are placed in escrow to ensure that the seller meets specific conditions before the funds are released. The escrow agent oversees the agreement, ensuring that both parties adhere to the terms before finalizing the deal, thus providing security and protection for all involved in the transaction. Once the conditions are satisfied, the escrowed funds or assets are transferred to the appropriate party.