An escrow agent (sometimes called the escrow officer) carries out the terms of an escrow agreement.  In a real estate transaction, [escrow](https://www.masterclass.com/articles/what-is-escrow-explained) is when the potential buyer of a home—or the buyer’s lender, typically a financial institution—makes an earnest money deposit in an account related to the home’s agreed-upon price. This money is deposited in good faith that both the home buyer and seller will fulfill their agreed-upon duties necessary to closing on a real estate property.

The escrow agent puts the money, along with the deed of the home provided by the seller, into an escrow account for safekeeping. When the terms of the agreement are met, the funds in the escrow account are released, and can be used towards the down payment of the house. As a neutral third party, the escrow agent must have no vested interest in the funds they protect and has equal obligations to carry out the interest of both parties. Though usually associated with real estate transactions, escrow agreements are used in business mergers, [stocks](https://www.masterclass.com/articles/what-are-stocks), and acquisitions as well. 

The escrow agent is usually an attorney or employee of a title company obligated to follow the instructions of the escrow agreement. Their duties are usually defined by the particular agreement they are overseeing, but here are a few of the typical duties of an escrow agent. 

- __Overseeing the escrow account__: In a real estate transaction, the escrow agent is responsible for making sure the assets deposited by the buyer are accurate and up to date. 
- __Holding the two parties to their obligations__: The escrow agent is responsible for making sure that the parties’ obligations—like home inspections and appraisals, or securing financing—are clear and met within the contractually specified amount of time. 
- __Disbursement of escrow funds__: In a real estate closing, when all obligations of the contract are met, the agent disburses funds to the seller and delivers the deed to the buyer. This is called the “close of escrow” and means that the transaction is complete.  
Trustees and escrow agents are similar because they are both third-party entities that are legally responsible for the protection and disbursal of the assets of another party. The main difference between a trustee and an escrow agent is how and when each is used. Escrow transactions reserved for agreements between two beneficiary parties, like home buyers and home sellers. Trusts, on the other hand, are created by individuals (grantors) for the purposes of supporting the beneficiaries. Much like an escrow agent, a trustee acting in the best interests of the beneficiary has particular duties depending on the structure of the trust. 

A trustee is an individual who is given control over the management of property contained in a trust account, which is when property or assets are held from a beneficiary until they meet certain obligations. While escrow agents have a legal and fiduciary responsibility to act in the best interests of both parties to a transaction, a trustee is obligated to the trust beneficiary and nobody else. 

Get the [MasterClass Annual Membership](https://www.masterclass.com/) for exclusive access to video lessons taught by business luminaries, including Sara Blakely, Chris Voss, Robin Roberts, Bob Iger, Howard Schultz, Anna Wintour, and more.
An escrow agent is a neutral third party who carries out the escrow process, which ensures that two parties within a financial transaction fulfill their agreed-upon obligations before funds are released. 


An escrow agent is a neutral third party who carries out the escrow process, which ensures that two parties within a financial transaction fulfill their agreed-upon obligations before funds are released. 


Escrow Agent: Understanding the Role of an Escrow Officer

An escrow agent (sometimes called the escrow officer) carries out the terms of an escrow agreement. In a real estate transaction, <a href='https://www.masterclass.com/articles/what-is-escrow-explained' target='_self' class='mc-text--link' data-mc-segment-trigger='true' data-mc-segment-event-type='Article Page Click' data-event-obj='{"textTag":"p","href":"https://www.masterclass.com/articles/what-is-escrow-explained","linkCopy":"escrow","category":null}'>escrow</a> is when the potential buyer of a home—or the buyer’s lender, typically a financial institution—makes an earnest money deposit in an account related to the home’s agreed-upon price. This money is deposited in good faith that both the home buyer and seller will fulfill their agreed-upon duties necessary to closing on a real estate property.The escrow agent puts the money, along with the deed of the home provided by the seller, into an escrow account for safekeeping. When the terms of the agreement are met, the funds in the escrow account are released, and can be used towards the down payment of the house. As a neutral third party, the escrow agent must have no vested interest in the funds they protect and has equal obligations to carry out the interest of both parties. Though usually associated with real estate transactions, escrow agreements are used in business mergers, <a href='https://www.masterclass.com/articles/what-are-stocks' target='_self' class='mc-text--link' data-mc-segment-trigger='true' data-mc-segment-event-type='Article Page Click' data-event-obj='{"textTag":"p","href":"https://www.masterclass.com/articles/what-are-stocks","linkCopy":"stocks","category":null}'>stocks</a>, and acquisitions as well.

What Is an Escrow Agent?

The escrow agent is usually an attorney or employee of a title company obligated to follow the instructions of the escrow agreement. Their duties are usually defined by the particular agreement they are overseeing, but here are a few of the typical duties of an escrow agent. <ul class="mc-m-4 list-styled"><li class="">Overseeing the escrow account: In a real estate transaction, the escrow agent is responsible for making sure the assets deposited by the buyer are accurate and up to date. </li><li class="">Holding the two parties to their obligations: The escrow agent is responsible for making sure that the parties’ obligations—like home inspections and appraisals, or securing financing—are clear and met within the contractually specified amount of time. </li><li class="">Disbursement of escrow funds: In a real estate closing, when all obligations of the contract are met, the agent disburses funds to the seller and delivers the deed to the buyer. This is called the “close of escrow” and means that the transaction is complete. </li></ul>

What Does an Escrow Agent Do?

Trustees and escrow agents are similar because they are both third-party entities that are legally responsible for the protection and disbursal of the assets of another party. The main difference between a trustee and an escrow agent is how and when each is used. Escrow transactions reserved for agreements between two beneficiary parties, like home buyers and home sellers. Trusts, on the other hand, are created by individuals (grantors) for the purposes of supporting the beneficiaries. Much like an escrow agent, a trustee acting in the best interests of the beneficiary has particular duties depending on the structure of the trust. A trustee is an individual who is given control over the management of property contained in a trust account, which is when property or assets are held from a beneficiary until they meet certain obligations. While escrow agents have a legal and fiduciary responsibility to act in the best interests of both parties to a transaction, a trustee is obligated to the trust beneficiary and nobody else.

What Is the Difference Between a Trustee and an Escrow Agent?

Get the <a href='https://www.masterclass.com/' target='_self' class='mc-text--link' data-mc-segment-trigger='true' data-mc-segment-event-type='Article Page Click' data-event-obj='{"textTag":"p","href":"https://www.masterclass.com/","linkCopy":"MasterClass Annual Membership","category":null}'>MasterClass Annual Membership</a> for exclusive access to video lessons taught by business luminaries, including Sara Blakely, Chris Voss, Robin Roberts, Bob Iger, Howard Schultz, Anna Wintour, and more.

Want to Learn More About Business?

An escrow agent is a neutral third party who carries out the escrow process, which ensures that two parties within a financial transaction fulfill their agreed-upon obligations before funds are released.