Escrow is a legal concept representing a financial instrument. Escrow is the use of a third party, which holds an asset or funds before they are transferred from one party to another and associated with a real estate transaction, but it can apply to any situation where funds will pass from one party to another party.
An escrow account is a third-party account that holds the asset until the conclusion of a specific event or time. In the context of Dubai, dictated under the new law, all payments made towards the purchase of any off-plan property need to be deposited into the escrow account of the developer.
An escrow account is a third-party storage place for assets until the conditions of a contract are met.
An escrow account allows people to deposit their money in the account and lets the borrower continue use of this money until something goes wrong or its time for it to be returned. You can think about an escrow account as insurance that protects both parties- if you tell someone you'll do something and they pay you up front, and then can't do it later on down the line, at least you know where your money will go.