Escrow
Escrow is a financial arrangement in which a neutral third party holds assets or funds until the conditions of a transaction are fulfilled. Common in real estate, mergers, and acquisitions, escrow provides security for both buyers and sellers by ensuring that assets are only transferred once all terms are satisfied. It minimizes risk in transactions, protecting both parties from non-performance or disagreements.
Key Takeaways
- Third party holds assets until transaction conditions are met.
- Common in real estate, mergers, and acquisitions.
- Protects both parties from non-performance or disputes.
- Minimizes transaction risk and ensures security.