What does the term "escrow" refer to in a real estate transaction?

In a real estate transaction, "escrow" specifically refers to an arrangement where a neutral third party holds funds or documents until certain conditions are met. This process provides security to both the buyer and the seller, ensuring that the buyer's money is only released when all terms of the agreement are fulfilled, such as completing necessary inspections or finalizing paperwork. By utilizing an escrow service, parties involved can proceed with the transaction with confidence, knowing that their interests are protected until the deal is finalized.

The other options mention concepts related to real estate but do not accurately define escrow. Agreements for property maintenance pertain to terms set between owners and service providers but do not involve the holding of funds or documents. Methods of securing a loan relate to financing, whereas escrow specifically deals with safeguarding funds during transactions. Lastly, a type of investment strategy is unrelated to the process of holding and managing funds or documents, distinguishing escrow distinctly within real estate practices.