Quick Answer
An escrow deposit is money held by a neutral third party — usually a title company or attorney — under the terms of the purchase contract, released only according to those terms or by mutual written agreement. It is different from a mortgage escrow account, which your lender uses after closing to collect and pay taxes and insurance.
01
Transaction escrow versus mortgage escrow
Transaction escrow holds the buyer's deposit between contract and closing. Mortgage escrow is an ongoing account your servicer maintains after closing, collecting one twelfth of annual taxes and insurance with each payment.
Both are called escrow, which confuses nearly every first-time buyer. They serve completely unrelated purposes.
02
The neutral holder's role
The escrow agent is not the buyer's or the seller's advocate. They follow the contract. They cannot release funds because one party is upset, and they cannot accept verbal instructions.
That neutrality is what makes the deposit meaningful to a seller and safe for a buyer.
03
How funds get released
At a successful closing, the deposit is applied to your obligations on the settlement statement. On a contingency termination, both parties normally sign a release and the funds are returned.
When parties disagree, the escrow agent follows the contract's dispute procedure rather than choosing a side.
04
Wire fraud is the real risk
Criminals monitor real estate email threads and send convincing fake wire instructions at exactly the right moment. Never accept instructions or changes by email alone.
Call the title company at a number you obtained independently, confirm every digit, and call again after sending to verify receipt. Federal guidance on this fraud pattern is published by the FBI's Internet Crime Complaint Center.
05
Mortgage escrow after closing
Your servicer estimates annual taxes and insurance, collects monthly, and pays the bills when due. Because Davie property taxes are reassessed after a sale and insurance premiums move annually, the first escrow analysis after year one commonly changes your payment.
Budget for that adjustment rather than being surprised by it.
06
Who to ask
Escrow questions belong to the title company and your agent jointly. Experienced real estate brokers Davie, FL clients rely on will read the settlement statement with you line by line before you sign anything.
Next, walk through the signing itself in what happens at a real estate closing.