Escrow (Real Estate)

In real estate, "escrow" has two distinct meanings that are sometimes confused. First, a closing escrow: the escrow company or title officer holds the purchase price, deed, and other closing documents until all conditions to closing are met — the buyer's loan is funded, the title is clear, and all closing requirements are satisfied. At closing, the escrow agent simultaneously records the deed, disburses funds to the seller, and delivers the mortgage to the lender.

Second, an impound escrow (also called an escrow account): the monthly mortgage payment includes an amount for property taxes and homeowner's insurance, which the lender holds in an escrow account and disburses when taxes and insurance are due. This protects the lender by ensuring the property remains insured and taxes remain current (both required for a clean title and mortgage enforcement). The initial escrow disclosure provided at closing shows projected escrow account activity for the first year. Document intelligence can extract escrow requirement provisions from deed of trust and loan agreement documents.