Which of the following best describes "escrow" in real estate?

"Escrow" in real estate is defined as a secure holding of funds or documents by a third party until the contractual obligations of a transaction are fulfilled. This process is essential in real estate transactions as it provides a level of security for both buyers and sellers.

When funds are placed in escrow, it ensures that the money is held safely until all the relevant conditions of the sale are met, such as inspections, approvals, and the transfer of ownership. This mitigates the risk for both parties, as the seller can be assured that the buyer is financially capable of completing the purchase, while the buyer can be confident that their funds will not be released until they receive the property according to the terms of the contract. Escrow agents or companies manage this process impartially, further assuring both parties that their interests are protected until closing.

Other options describe unrelated concepts in real estate. Legal representation of buyers pertains to the role of real estate agents or attorneys in helping clients navigate transactions. Determining real estate commissions refers to how agents negotiate their pay structures, which is not related to the escrow process. A property tax assessment procedure refers to how local governments evaluate property values for taxation purposes, without any connection to the secure holding of funds or documents in an escrow arrangement