What Is Escrow?

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An escrow is a financial arrangement wherein a third party intermediates a trade of any sort between two parties. Through this arrangement the escrow entity, called escrow agent, holds on to the payment made by buyer and oversees that the promised goods or services by the seller are delivered to the buyer. After buyer receives the promised goods or services, the escrow agent transfers the already made payment by the buyer to the seller’s account. So, in an escrow arrangement the buyer and seller do not even need to see each other, yet they can engage in a completely safe and secure financial trade through an escrow system.