Escrow or an escrow account—also known as an impound account or a reserve account—is a legal document that transfers possession or ownership of a legal document or property to a third party who is not a party to the underlying transaction that the escrow is intended to secure.

For example, escrow or an escrow account may be used to secure a transaction for the sale of real property (a warranty deed held in escrow) or for a loan to purchase real property (a deed of trust transferring ownership to the escrow).

Escrow or an escrow account might also refer to a bank or other account that holds money or other property (earnest money) while the parties to the underlying transaction are in the process of completing the transaction and fulfilling their contractual obligations.

An escrow agreement requires the escrow or escrow agent (a person or entity) to hold a document or property in trust for a specified amount of time or until the occurrence of a certain condition (full payment) or until both parties to the underlying transaction have fulfilled their contractual obligations—at which time the escrow agent is to hand over the document or the property to the grantee (buyer of real property) or the mortgagee (lender for purchase of real property), for example.

An escrow is like a trust account in that the escrow agent holds the document or property in trust for the benefit of another person and not for the benefit of the escrow agent. Although the person or entity that holds the property in trust under the terms of an escrow is often referred to as an escrow agent, they are not an agent with authority to act on behalf of and bind or obligate a certain person (a principal) as an agent is traditionally empowered to do under a state’s common law (court opinions or case law).

In Utah, an escrow or escrow account is a legal arrangement where a third party, known as an escrow agent, holds a document or property in trust while a transaction is being finalized. This is commonly used in real estate transactions, where an escrow account may hold a warranty deed or funds such as earnest money until the sale is complete and all contractual obligations are met. The escrow agent is responsible for safeguarding the assets and only releasing them when specific conditions are met, such as full payment or fulfillment of the contract terms. Escrow agents in Utah are regulated under state statutes, which dictate their duties and the handling of escrow accounts. They are not considered traditional agents with the authority to act on behalf of the parties involved but are instead tasked with neutrally holding and transferring assets as per the escrow agreement. It's important to note that while escrow services are commonly associated with real estate, they can be used in various types of transactions to secure the interests of all parties involved.