Who typically holds the escrow account in a real estate transaction?

In a real estate transaction, it is common for the broker to hold the escrow account. The escrow account acts as a neutral holding place for funds involved in the transaction, such as the earnest money deposit made by the buyer. The broker is responsible for managing this account and ensuring that funds are disbursed correctly according to the terms of the purchase agreement once the sale is finalized.

The broker’s role is crucial as they maintain compliance with state regulations and ensure a fair process for both parties involved in the transaction. They act as a mediator, safeguarding the interests of the buyer and the seller until all necessary conditions are met for the transaction to close. This level of oversight helps to build trust among the parties involved.

It's important to note that while other parties like the buyer, lender, or title company could have an interest in the funds, they typically do not manage the escrow account themselves. The buyer might deposit money into the escrow account, the lender may require it to be held there as part of the financing process, and the title company often conducts the closing, but the broker is generally the one who holds and manages the escrow funds.