An escrow account is held by a third party as a place to keep money safe until it is time for the money to be disbursed. In the home buying process the initial escrow deposit is usually “earnest money”, an amount the buyer deposits after their offer is accepted, but well before closing is finalized. Escrow protects both buyers and sellers, by pledging “good faith” money towards the sale that doesn’t actually change hands until certain conditions are met. Escrow is also a common feature on a mortgage account; funds are prepaid by the borrower into escrow for property taxes and/or homeowners insurance. The mortgage lender then pays these bills out of the escrow account but does not use the funds for any other purpose.