An escrow is a financial arrangement where a third party holds and regulates payment of the funds required for two parties involved in a given transaction. It helps make transactions more secure by keeping the payment in a secure escrow account which is only released when all of the terms of an agreement are met as overseen by the escrow company.
Escrows are very useful in the case of a transaction where a large amount money is involved and a certain number of obligations need to be fulfilled before a payment is released like in the case of a website being built where the buyer might want confirmation of the quality of work being done before making a full payment, and the seller doesn’t want to extend a massive amount of work without any assurance that he or she will receive payment. While the payment is ‘In Escrow’ the transaction can be safely carried out without risk of losing money or merchandise due to fraud. This eliminates all legal jargon and allows for secure transactions and confident buyers and sellers.
How does Escrow Work?
Escrow.com reduces the risk of fraud by acting as a trusted third-party that collects, holds and only disburses funds when both Buyers and Sellers are satisfied.
- Buyer and Seller agree to terms – Either the Buyer or Seller begins a transaction. After registering at Escrow.com, all parties agree to the terms of the transaction.
- Buyer pays – The Buyer submits a payment by approved payment method to secure Escrow Account, Escrow verifies the payment, the Seller is notified that funds have been secured ‘In Escrow’.
- Seller ships merchandise to Buyer – Upon payment verification, the Seller is authorized to send the merchandise and submit tracking information. Escrow verifies that the Buyer receives the merchandise.
- Buyer accepts merchandise – The Buyer has a set number of days to inspect the merchandise and the option to accept or reject it. The Buyer accepts the merchandise
- Escrow.com pays the Seller – Escrow releases funds to the Seller from the Escrow Account.