Escrow agreements are frequently used in real property transactions. Attorneys-at-law routinely act as escrow agents so the buyer can perform due diligence, such as an inspection, on his potential acquisition while assuring the seller of his capacity to close on the purchase.
Under an escrow agreement, money, property, money or a bond is put into the custody of a neutral third party for delivery to the seller only after the fulfillment of the conditions specified.
The escrow agreement normally includes the identity of the appointed escrow agent, the escrow funds and detailed conditions for the release of these funds, the acceptable use of funds by the escrow agent, the duties and liabilities of the escrow agent, the escrow agent’s fees and expenses, and the jurisdiction and venue in the event of a legal action.
KEY VOCABULARY
acquisition
attorneys-at-law
bond
buyer
to close on the purchase
custody
to deliver something to to somebody
due diligence
escrow agreement
escrow agent
funds
inspection
jurisdiction
real property
to release funds
seller
venue