I have had escrow explained to me three times just now by three different people and I still don’t quite get it.
In: Economics
Remember when you were in grade school and you wanted to trade something with the dodgy kid? You had to play this stupid game where you tried to swap at the exact same time become you knew they were going to try to grab both items and run off. One solution would be to give the items a neutral third party, like a teacher, and let them complete the trade.
That is what escrow is. It lets two people who don’t completely trust each other complete a transaction. I’m buying a how from you, but we’re strangers, who knows if we are trustworthy. So I write a check to an escrow company, they verify to you they have received the money, you sign the deed over to me, escrow verifies that it is all good, and releases the money to you, less a small service charge.
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