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Finance: What is Escrow? 7 Views

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Description:

What is Escrow? Escrow is the process by which a third party, often an attorney or financial institution, serves to safeguard funds and title to assets earmarked for a transaction until both buyer and seller have completed their contractual obligations, which may include legal background due diligence, inspection, and other checks and verifications. The escrow shows the seller and buyer that both sides have serious intent and have the means to close the transaction. An escrow account may also hold executive stock bonuses or other types of perks that may be earned as income for a particular year but cannot be exercised until a contractually agreed upon waiting period.

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Transcript

00:00
Finance a la shmoop what is escrow so leave it to the French they'll cook and [Man and woman cooking food]
00:08
eat anything horse hoof pig snout and yes finally snail but wait that's
00:14
different oh okay well escrow is a financial state
00:18
of being akin to the pearly gates where st. Peter is a you know checking you out [St Peter appears in the clouds]
00:24
there's a transaction a contract a whole bunch of signatures a commitment and

00:28
then a holding time our waiting period or cooling period will the transaction
00:33
be allowed through the gates or in Dante fashion will it be sent back to the pits
00:38
of hell to be renegotiated fixed or suffer eternal damnation yeah those are
00:43
the questions escrow is that special place where your dough hangs out until [Escrow definition appears on 100 dollar bill]
00:48
the grander powers that be decide whether or not that dough can be you
00:53
know shoveled along forward selling your home well it's likely the buyer first
00:57
puts their dough into an escrow account which only gets released to you once [money transfers into a piggy bank]
01:02
those pesky socialist termites have been eradicated by Clint Eastwood and if the
01:07
termites win well you won't be able to afford cooked snail any time soon and
01:12
we'll just put it that way so its escrow your money just kind of sits there until [Escrow piggy bank waiting at traffic lights]
01:16
gets a green light all the contracts are signed everything's good then the money
01:20
just wires into your bank account and then you can move on with life
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