escrow

Vocabulary Word

Definition

'Escrow' is a term usually used in real estate transactions, where a third party holds funds or assets on behalf of two parties involved in a transaction. The escrow holds these until all conditions of the transaction are satisfied.

Examples in Different Contexts

In impact investment, 'escrow' can be used to manage funds designated for specific projects securely. An impact investment advisor might state, 'Our escrow arrangements ensure that funds are allocated correctly, aligning financial flows with project milestones.'

Practice Scenarios

Real Estate

Scenario:

We've received a potential buyer for the property, they seem quite serious. I suggest we make sure all processes are correctly followed, especially around payments.

Response:

Absolutely, the purchase funds should be held in escrow until all transaction conditions, including the house inspection, are completely met.

Legal

Scenario:

The case's outcome is still uncertain, which could impact the settlement process. A neutral party holding the amount might make things smoother.

Response:

Having the settlement amount in escrow by a trustworthy third party could ensure fairness throughout the legal proceedings.