A neutral third party between buyer(s) and seller(s) during a real estate transaction that handles the funds and helps coordinate the final signing appointment.
An escrow company is a neutral third party between buyer(s) and seller(s) during a real estate transaction that handles the funds and helps coordinate the final in-person signing appointment.
Because buying or selling real estate generally involves transferring a large amount of money, it is imperative to have a licensed and highly-regulated neutral third party to coordinate the transaction. In some regions, the Escrow Company and Title Company are the same entity. Escrow orders title insurance, collects and prepares loan/legal documents, arranges document signing, collects funds, and disperses the funds to the appropriate parties in the transaction.
It is important to note that homebuyers should only contact their escrow officer to confirm their wire instructions and other transfer-related information before moving any funds.