Do You Know Escrow?

Escrow accounts discussion

Have you ever bought a house? If you have you may have come across the term “escrow.”  Escrow accounts sound complicated, but really they are a thing of beauty and I will tell you why. First escrow should be seen as limbo. What I mean by that is that the money that you are using to pay for an asset such as a house or in the case of online shopping a particular makeup that you like, is placed in temporary account managed and monitored by a third party. What this means for you is that once you let go of your dollar bills you don’t have to be afraid. The money is held in reserve until you have received the goods in question.

This gives you time to inspect the goods and make sure that what you were promised is what you got. In the case of a home purchase, the money is held in limbo giving the builder some reassurance that the money will be there once the transaction is ready to be processed and the buyer knows that the house will be done correctly before the money has been surrendered. This prevents buyers from feeling like they are left holding the bag.

There is a nice saying that goes like this. Never buy a cat in a bag. Well, escrow really allows you to view the cat before you buy it.

In online retailing, there are financial mechanisms that act the same way. For example paypal is like that. What happens with paypal is the seller enters into an agreement with them. When a buyer purchases something online the money is then held by paypal until sufficient time has passed and the customer has not filed a complaint that the items were defective or not as described.

The take away from all of this is that if you paypal to purchase anything, you are truly safe. However I would recommend that you quickly place a complaint in with paypal if you really do have an issue so that your money can be refunded.