What does the term "escrow" refer to in real estate?

In real estate, the term "escrow" refers to a financial arrangement where a neutral third party holds onto funds or important documents until specific conditions of a transaction are satisfied. This process is crucial in real estate transactions to ensure that both the buyer and seller adhere to the terms of the agreement. The escrow agent manages the funds and documents, ensuring that neither party can access them until all stipulated conditions—such as the completion of inspections, financing, or other contingencies—are met. This process protects both parties' interests and helps facilitate a smoother transaction.

The other options do not accurately capture the essence of what "escrow" means in the real estate context. For example, a type of mortgage arrangement pertains to financing and does not involve the holding of funds or documents by a third party. Similarly, a market analysis report assesses property values and is unrelated to the escrow process, which concerns transaction security. A legal dispute regarding property ownership refers to conflicts over title or rights and is a different aspect of real estate law entirely.