What is the primary role of an escrow agent in a real estate transaction?

The primary role of an escrow agent in a real estate transaction is to hold and distribute funds as per the purchase contract. This responsibility is critical because the escrow agent acts as a neutral third party that ensures both buyers and sellers fulfill their obligations specified in the agreement before any funds change hands or title is transferred.

The escrow process involves managing the funds that are deposited by the buyer—such as earnest money—as well as any other fees until all conditions of the sale are met. Once the requirements are satisfied, the escrow agent disburses the funds to the appropriate parties, ensuring a smooth and fair transaction.

In contrast, managing the listing agreement is typically the responsibility of the real estate agent rather than the escrow agent. Negotiating sale prices is also a duty performed by agents rather than the escrow agent, who remains neutral. Inspecting the property is part of the due diligence process conducted by buyers, inspectors, or agents, and does not fall under the responsibilities of the escrow agent.