What is required for the creation of an escrow?

The creation of an escrow is primarily contingent upon the execution of a binding contract between the parties involved in the transaction. This contract outlines the terms of the agreement, detailing what is expected from each party. Once this binding contract is in place, it authorizes the escrow agent to manage the transaction, ensuring that the terms of the agreement are fulfilled before the escrow can be closed and the transfer of property occurs.

While aspects such as payment of an initial deposit or acceptance of a sales offer may play significant roles in the escrow process, they are not the foundational requirement for creating an escrow. An escrow cannot be officially established without a binding agreement that clearly outlines the transaction details and the responsibilities of each party. Therefore, having a binding contract is essential for the initiation of escrow services.