Escrow fees are charges paid to a neutral third party that holds funds or documents during a real estate transaction. This party, known as an escrow agent, ensures that both the buyer and seller meet their obligations before the deal is finalized. The fees typically cover the agent's services and can vary based on the property's price and the complexity of the transaction. These fees are usually split between the buyer and seller, but the exact arrangement can be negotiated. Escrow fees are an essential part of the home buying process, providing security and peace of mind for both parties involved.