• In real estate, an "earnest money" deposit accompanies the buyers offer to purchase.  If the contract is accepted, this money received by a selling broker is placed in an "escrow" account and serves as a binder or promise to complete the sale. 
   
• In lending, a third party lender will usually require the purchaser-borrower to deposit a specified amount of money into an "escrow" account for payment of future taxes and insurance as a "reserve" fund.  

Very simply, it is a deposit of funds, a deed, or other instrument by one party for the delivery to another party upon completion of a certain condition or event agreed to by all parties to the transaction

The escrow "holder" must [1] safeguard the funds and/or documents, [2] disburse the funds, and/or [3] convey title only when all provisions of the escrow have been fulfilled.  Usually, this function is performed by an attorney.