What is it called when funds or documents are held by a disinterested third party until specific conditions are met in a real estate transaction?

The correct term for when funds or documents are held by a disinterested third party until specific conditions are met in a real estate transaction is escrow. In an escrow arrangement, a neutral third party, often an escrow agent or company, is entrusted with holding these items to ensure that all parties fulfill their obligations before the transaction is completed. This process helps to protect the interests of all parties involved, providing security that conditions such as inspections, financing, or other prerequisites have been satisfied before the sale is finalized.

Escrow is a vital aspect of real estate transactions, ensuring that funds or pertinent documents are not disbursed until all contractual conditions have been met, thereby minimizing the risk for all parties. The concept of escrow is widely recognized and used in various types of transactions beyond real estate, serving as a safeguard for the contractual commitments made by buyers and sellers.