Buyers and sellers should open escrow in order to assure concurrent performance. Concurrent performance means that the grant deed is from escrow, that is, after all obligations, such as loans, inspection fees, monies for termite clearance, title fees and the like have been paid. Escrow guarantees that the money is taken care of properly and legally and that the real estate transaction will occur with concurrent performance.
Escrow also assures principals that their money and important papers are safely in the hands of a trusted third party who has the legal responsibility to protect them. In essence, escrow provides a clearinghouse for funds and documents and a means for seeing that all the conditions of the real estate transaction are met before the property changes hands. All parties to the escrow have legal protection during the period of escrow. The neutral escrow holder, thereby minimizing the possibility of fraud or violation of any terms of the agreement, manages everything.