What is escrow and how does it work?
In: Economics
Escrow is someone trusted by both sides to hold the money until the transaction is complete. It can be a bank, a lawyer, a friend, a government, a broker.
I want to buy your car but I don’t trust you to give me the keys if I give you the money first. You don’t trust me to give you the money if you give me the keys first. But we both trust James so I give him the money and once you give me the keys he gives the money to you. While James has the money he’s holding it in escrow.
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