Escrow involves an impartial third party holding items of value, such as earnest money or documents, during a real estate transaction until specific conditions are met. It can refer to the initial deposit, an escrow account for taxes and insurance, or the closing process overseen by an escrow officer. Funds may be held back in escrow after ownership transfers for various reasons, such as repairs or temporary occupancy. Once all paperwork is signed and funds disbursed, the escrow closes, and the buyer receives a closing statement for future reference.
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