Here at Express Cash Flow, we get asked a lot about what escrow is. For the most part, it is asked by clients who are here to use our nationwide commission advance service. Sometimes our clients need a loan to help them make ends meet between their sales deals, because their commission money is tied up in an escrow account. If you have had to use a nationwide commission advance for this reason, then the following explanation of what escrow is should be really helpful.
In basic terms, escrow is an account held by a third party. This is an unattached party who holds the money from a transaction while the deal is still being worked on. Generally, there will be certain requirements that need to be met by one or both of the active parties in the deal. Until all of these requirements are met, the money cannot be released to the intended party.
Many wonder why the money has to be surrendered at all if it is not going to be given to the rightful party. Honestly, while this might seem like a needless complication, it is done to protect all parties. For instance, if the money were to be turned over before all conditions were met, the party with the money could walk away before all agreed upon services were rendered.
Escrow also protects the party who will eventually be receiving the money. When the paying party is puts up the money at the beginning, it shows that they really do have the needed funds to complete the transaction.
In the end, it is a way to ensure the money is there and to ensure that no payment is actually made until everyone is happy with the work that has been completed.