What is Escrow, and why do I need it?

What is Escrow, and why do I need it?
The Wikipedia definition of Escrow:
Escrow is a legal arrangement in which an asset (such as cash, real property or other tangible assets) is deposited into an escrow account under the trust of a neutral third party (escrow agent) pending satisfaction of contractual contingency or condition. Once the condition has been met, the escrow agent will deliver the asset to the party prescribed by the contract.

The purpose of using an escrow account for real estate transactions is to involve a neutral, non-emotionally linked third party entity (escrow officer) to insure that the requirements and conditions of both the lender and borrower are properly satisfied before the closing of the sale. It is the escrow officers responsibility to see that all of the required loan and title documents and other requirements are all properly signed and processed according to the time table mapped out between the buyer, seller, and lender.

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