Escrow places money or documents with a third party to be held until specified conditions are met. In a real estate transaction, the escrow holder follows the applicable instructions and requirements. Watch the funds enter custody, remain held while conditions are checked, and move only when release is authorized. Custody does not make the funds the holder's own money. The word also appears in mortgage servicing. A mortgage escrow account can collect amounts for property taxes and insurance. That ongoing account is a different use from holding transaction funds pending closing. Quick check: may an escrow holder treat the buyer's deposit as personal spending money? No. The holder must follow the applicable instructions and rules.