ESCROW ACCOUNT Meaning and
Definition
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An escrow account is a financial arrangement typically established by a third-party intermediary, known as an escrow agent or escrow holder, to hold funds or assets temporarily during a transaction between two parties until specific conditions are met. It acts as a safeguard for both parties involved in the transaction, ensuring the secure transfer of money or assets.
In this arrangement, the escrow agent maintains the funds or assets until all the agreed-upon terms and conditions outlined in the escrow agreement are fulfilled. The funds or assets can be released to the intended recipient only when all the conditions have been satisfied, providing a level of protection and assurance to both parties.
Escrow accounts are commonly used in real estate transactions, mergers and acquisitions, and other large-scale financial agreements. For instance, when purchasing a property, the buyer may deposit the funds into an escrow account until the seller fulfills all the necessary obligations, such as completing repairs or transferring legal ownership. Once all the requirements are met, the funds are released to the seller, and the transaction can be finalized.
In summary, an escrow account acts as a secure intermediary for holding funds or assets during a transaction until the specified conditions are met. It provides both parties with a level of protection and ensures that the agreed-upon terms are fulfilled before transferring the funds or assets.
Common Misspellings for ESCROW ACCOUNT
- wscrow account
- sscrow account
- dscrow account
- rscrow account
- 4scrow account
- 3scrow account
- eacrow account
- ezcrow account
- excrow account
- edcrow account
- eecrow account
- ewcrow account
- esxrow account
- esvrow account
- esfrow account
- esdrow account
- esceow account
- escdow account
- escfow account
- esctow account
Etymology of ESCROW ACCOUNT
The word "escrow" originated from the Middle English term "escrowe", which was borrowed from the Old French word "escroe" meaning a scrap or piece of parchment. This word itself came from the Vulgar Latin word "scroda", meaning a scroll or written document. Over time, the meaning of "escrow" evolved from a physical document or piece of parchment to a legal arrangement where money or assets are held by a neutral third party until certain conditions are met. The term "escrow account" specifically refers to a financial account where funds are deposited to be held in escrow.
