What is the primary purpose of escrow in a real estate transaction?

The primary purpose of escrow in a real estate transaction is to hold funds and documents until the transaction is complete. Escrow acts as a neutral third party that safeguards the assets involved in the transaction, ensuring that all contractual obligations are met by both the buyer and the seller before finalizing the transfer of property ownership. This process helps to protect both parties by ensuring that the buyer's funds are only released to the seller when all terms of the sale have been fulfilled, and any necessary documents, like the title and deed, are properly executed and recorded.

The other options represent different aspects of the real estate process but do not accurately convey the primary function of escrow. While transferring property ownership is certainly a goal of the transaction, escrow itself does not perform that action; rather, it facilitates the conditions that make the transfer possible. Similarly, negotiating selling prices and providing financing options are integral functions of the real estate market, but they fall outside the specific role of escrow, which is primarily concerned with the secure holding of funds and documentation until all conditions of the sale are satisfied.