Escrow
An arrangement where a neutral third party holds money or documents until agreed conditions are met — for example, holding a buyer’s deposit until closing. The word also describes lender-managed accounts that collect property taxes and insurance alongside the mortgage payment and pay those bills when due.
Related terms
Earnest Money
A deposit the buyer puts down when an offer is accepted to show serious intent, typically held by a neutral party such as an escrow or title company. At closing it is credited toward the purchase. Whether it is refundable if the deal falls apart depends on the contract’s contingencies.
Due Diligence
The investigation a buyer performs before completing a purchase: inspections, title review, verifying leases and income, checking taxes, insurance costs, and anything else that could change the deal’s math. Purchase contracts often include a due-diligence or inspection period during which the buyer can renegotiate or exit under the contract’s terms.