Put simply, escrow is used to make sure the funds of a real estate transaction change hands at the moment of a closing. That is not the legal definition of escrow, but it is the underlying reason to use escrow. If you are a buyer, you want your funds in the seller’s account only once the deal closes – not before. If you are a seller, you want your money when the deal closes, not later. An escrow company is the neutral entity that holds the funds until the closing is completed and disburses the funds.