How do big transactions happen?

Big transactions happen all the time. In corporate these transaction include selling properties, giving loans, mergers & acquisitions, etc. So, the question is how do these transactions actually take place?

One major problem in these transactions is default in payment by buyer after transferring of asset or default in transferring of asset by seller after making payment. Such defaults even if further sorted out can cause high opportunity cost to victim parties and also legal problems.

Thus to resolve these issues Escrow accounts come into play. An escrow account is an arrangement for a third party to hold the funds of the transaction temporarily. Like, buyer would transfer the agreed funds to escrow account, after that seller would transfer the asset to buyer and when all the terms of the agreement are successfully met then funds in the escrow account would be transferred to seller. Thus, a clean & safe transaction happen.

This is a highly safe way for ensuring security & integrity in the transaction and avoiding any disputes further leading to legal troubles.

Please comment for topics you want to read about.