photo credit: TheTruthAbout…
Tawnya Gilreath, writing on the Biz Ben Blog, offers an insightful look at how escrow accounts can protect you during a big transaction such as selling a business, or an invention:
In dealing with business sales, often times the seller or the buyer will ask about the use of an escrow company. The seller may say ‘Why can’t the buyer just pay me cash or give me a cashier’s check’?
Escrow does a number of things during the business for sale transaction that are designed to protect both the buyer and the seller. First, it is important for the seller to know that the buyer’s earnest money deposit or good faith deposit actually has some cash behind it. Escrow will deposit the buyer’s check and hold these funds in an escrow account until such time as the transaction closes or is cancelled by the buyer and seller.