WHAT IS A ESCROW? After home buyers and sellers have an executed purchase agreement what happens? The transaction is placed in escrow. Home Buyers and Sellers will receive escrow instructions. An escrow is a deposit of funds, a deed or other instruments by one party for the delivery to another party upon completion of a particular condition or event. The escrow holder has the obligation to safeguard the funds and documents while they are in the possession of the escrow holder. Additionally, the escrow holder disburse funds and conveys title only when all provisions of the escrow have been complied with. The legal definition is provided in, The California Escrow Law-Section 17003 of the Financial Code.