What is Escrow: Understanding Real Estate Vocabulary

“Escrow” is something of great significance, like an item of value, money, or important documents. The item of significance is given to a third party for safe keeping until certain conditions have been met and the item can be delivered to the receiving party.

For example, 

The context in which the term escrow is used varies state to state. The initial escrow deposit is typically referred to as the earnest money deposit in Minnesota.

In Minnesota, when someone is talking about an escrow, they are typically referring to a sum of money that is being held by a third-party, (typically a title company or lender) for the purposes of having a certain project completed after closing.