Escrow is when money or documents are held in trust by a third party to be delivered to another party at a set time, such as when certain conditions are met or for regular periodic payments. 

There are two most common types of escrow for real estate:

The first is when a portion of a borrower’s monthly payments are held by, and subsequently delivered by, the lender to pay property taxes and homeowners insurance when they become due.

It is also when a real estate agency holds and then transfers funds, such as deposit money, or paperwork that needs to be made between the buyer and seller after certain obligations are met.