What function do escrow agents perform in a real estate transaction?

Escrow agents play a crucial role in real estate transactions by acting as a neutral third party that holds the deed as well as other necessary documents and funds until all the conditions of a sale are met. This process ensures that both the buyer and the seller meet their contractual obligations before the transfer of ownership takes place. The escrow agent safeguards the interests of both parties, handling the disbursement of funds, managing signed documents, and facilitating a smooth closing process. By holding the deed, the escrow agent prevents either party from having undue advantage and ensures that the transaction proceeds fairly and according to the agreed terms.

Other functions, such as managing property taxes, evaluating property value, or providing legal representation, fall outside of an escrow agent's responsibilities. While these tasks are essential in a real estate transaction, they are typically managed by specialized professionals, like tax offices, appraisers, or lawyers, rather than the escrow agent itself.