Who does escrow primarily protect in a real estate transaction?

In a real estate transaction, escrow primarily protects both the buyer and the seller by serving as a neutral third party that holds funds and documents until all the conditions of the sale are satisfied. This process ensures that the interests of both parties are safeguarded throughout the transaction.

For the buyer, escrow provides a level of security by ensuring that their deposit or earnest money is held safely and that it will only be released to the seller once certain contractual obligations are met, such as the completion of inspections, securing financing, and other conditions laid out in the purchase agreement. This process helps to mitigate risk for the buyer, as they can be confident that their investment is protected until all terms of the contract are fulfilled.

Similarly, for the seller, escrow protects their interests by ensuring that they receive the agreed-upon funds only when they fulfill their obligations under the contract, such as delivering clear title to the property. This arrangement helps establish trust between both parties, as it clarifies the process and conditions under which the transaction will be completed.

The other options do not represent the primary protection provided by escrow effectively, as they include parties that are not directly involved in the safeguard of the transaction process.