Escrow plays a crucial role in New York real estate transactions, acting as a neutral third party that holds funds and important documents during the buying and selling process. When a buyer and seller agree on the terms of a real estate transaction, they may deposit the funds and necessary documents with an escrow agent or company.

One example of the role of escrow in New York real estate transactions is in the purchase of a new property. Once the buyer and seller have agreed to the terms of the sale, the buyer may deposit the earnest money into an escrow account to demonstrate their commitment to the purchase. This provides assurance to the seller that the buyer is serious about the transaction.

Another example is in the case of a mortgage transaction. The lender may require the borrower to deposit funds into an escrow account to cover property taxes and insurance. This ensures that these expenses are paid on time, reducing the risk for the lender.

References:

• "Understanding Escrow in Real Estate Transactions" - New York Real Estate Journal
• "The Role of Escrow in New York Real Estate" - New York State Bar Association