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escrow sounds fun to say but what does it actually mean its a way for a buyer to demonstrate a little bit of skin in the game for a contract so in the event a buyer decides to default or cancel the contract that money could be in question and it could potentially be in the hands of the seller these monies are going to be held into a non-interested third party oftentimes its either going to be an attorney or a title company do not give the check to your real estate agent were not allowed and just to be clear that money if and when you close is applied to your final cash to close or your closing costs its not just money that disappears and goes away because youve built this escrow account its actually applied to your close as a buyer you want to keep that escrow deposit as low as possible to really limit the amount of risk and as a seller you want to make that escrow deposit as high as possible to really have the buyer on the line for the property