Escrow is a process where a buyer puts money into the custody of a trusted third party with a guarantee that funds are available for payment to the seller once the specified set of conditions has been met. Escrow occurs between the time a seller accepts the offer and the buyer gets the keys to the new house. So how does one prepare for it? Here is a walk-through of the process, so that you get a better idea about how it works.
It’s a very simple process, where the buyer deposits funds into the escrow’s custody. The seller then ships the item or performs the required work and once the buyer approves, the escrow service pays the seller.
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The Sellers are safeguarded from chargebacks, insufficient funds, rip-offs, fraud and hoaxes. It is specially useful for intangible services and for any business transactions. This results in added security for both the parties. It also helps in minimizing the occurrence of any dispute.
The buyers can inspect the products before they finalise the payment. It gives the advantage of checking and then buying the items. If a buyer pays the escrow fees and requests escrow, there is no reason for a seller to refuse the services. With an escrow service, the buyers have the advantage of the right to return unsatisfactory services if it is proved factually. This takes the worry out of buying from unknown providers, without disclosing personal information to the unfamiliar party.
There are basically two types of escrow services: Tangible and Intangible.