In this episode of the Realty Terms series, Birdman is joined by Mountain Retreat Realty Experts and Stephanie Crane to break down one of the most important—and often misunderstood—real estate terms: escrow. Stephanie explains how escrow works as a neutral third party that protects both buyers and sellers by securely handling all funds involved in a transaction. From earnest money and down payments to repairs and closing costs, learn why opening escrow is the standard and safest way to complete a real estate deal, and how it helps prevent disputes and financial risk for everyone involved.

Escrow is a neutral, third-party account used during a real estate transaction to safely hold and manage all funds until the deal officially closes. Rather than money being exchanged directly between the buyer and seller, everything flows through escrow to ensure fairness, security, and transparency.

In this episode, Stephanie explains that opening escrow is the standard method used by Mountain Retreat Realty Experts and is the preferred way to handle transactions.

Once a contract is accepted:

• The buyer's earnest money deposit is placed into escrow

• Funds related to financing, down payments, and closing costs are routed through escrow

• Any negotiated repairs or credits that must be paid at closing are handled by the escrow officer

• At closing, escrow distributes funds appropriately and records the transaction

This process removes the risk of one party directly handing money to another and ensures all contract terms are met before funds are released.

Escrow acts as an unbiased third party, meaning:

• Neither the buyer nor the seller controls the funds

• Money is only released according to the contract

• Disputes—such as disagreements over earnest money if a contract is canceled—are handled impartially

If both parties disagree, escrow holds the funds securely until the issue is resolved, protecting everyone involved.

Escrow is opened for both parties at the same time once the transaction begins. Buyers and sellers do not open separate accounts—escrow serves the entire transaction from start to finish.

Escrow is a critical safeguard in real estate transactions. It ensures that all money is handled professionally, securely, and fairly—giving buyers and sellers peace of mind throughout the process and at closing.

House Keys is brought to you by

Mountain Retreat Realty Experts

https://mtnretreatrealty.com

House Keys is produced by Birdman Media™