Escrow Agent

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DEFINITION of 'Escrow Agent'

An entity that has fiduciary responsibilities in the transfer of property from one party to another. Typically associated with selling or buying a home or other property, the escrow agent will secure the property and examine documents to make sure that the terms of the sale are met on each end, serving both the buyer and seller in the transaction.

INVESTOPEDIA EXPLAINS 'Escrow Agent'

An escrow agent may be a title company when it comes to selling a home; the title company will hold the deed in escrow until all of the terms of both the buyer and seller are met. The buyer may deposit the money for the purchase with the escrow agent, which serves to "validate" the transaction prior to last-minute closing terms.

Whether the escrow agent is a business or an individual, the purpose they serve is that of a neutral, trusted third party to transactions that may involve persons who never end up meeting each other.

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RELATED FAQS
  1. Who manages an escrow account?

    An escrow account is managed by an outside party in order to hold valuables, such as money, property deeds and personal finance ... Read Full Answer >>
  2. Why does the loan-to-value ratio matter?

    For mortgage lenders and borrowers, the loan-to-value ratio is an important factor in determining the repayment terms of ... Read Full Answer >>
  3. What is the difference between a PMI (primary mortgage insurance) loan and a Federal ...

    Home buyers who are unable to contribute a traditional down payment of 20% may think home ownership is out of reach. However, ... Read Full Answer >>
  4. Why would a homebuyer need to take out PMI (private mortgage insurance)?

    Most conventional mortgage lenders carry strict requirements for home buyers, including credit history and score minimums, ... Read Full Answer >>
  5. Does the bank set up an escrow account for the buyer and seller in a home sale?

    An escrow service, rather than a bank, typically sets up an escrow account for the buyer and seller in the sale of a home. ... Read Full Answer >>
  6. What are the pros and cons of a simple-interest mortgage?

    The basic disadvantage of a simple interest mortgage lies in the fact that unless the borrower conscientiously makes all ... Read Full Answer >>
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