An escrow account is a neutral account that holds money or assets on behalf of two parties until agreed conditions are met. It lets a buyer and seller transact with confidence, because the funds are controlled by a trusted third party rather than handed over directly.
Where you’ll see it
You’ll see escrow used in off-plan purchases (where it is mandatory and project-specific) and in some resale and corporate transactions where funds are held pending completion or conditions. An escrow agent — usually a bank — controls release.
Why it matters
Escrow reduces risk for both sides: the seller knows the buyer’s money exists and is committed, and the buyer knows it will only be released when the agreed conditions are satisfied. It is a core safeguard in higher-value or staged property deals.
What it is not
An escrow account is not a normal personal or business account where either party can withdraw at will — releases are condition-based. The project-level version for off-plan is the developer escrow account.
Example
In a conditional transaction, the buyer’s funds sit in escrow until the seller meets agreed conditions; once verified, the escrow agent releases the money and the deal completes.
Connected documents and parties
Escrow agreement, transaction contract, release conditions; buyer, seller, escrow agent.
Going deeper: for how funds are held and released in a transfer, see a conveyancing specialist.
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