Escrow holders collect a "refundable pad" from each Buyer, which is a small amount of extra funds used to cover unexpected charges. There are several items such as fees, interest and prorations that may change daily during escrow. And while escrow can estimate the Buyer’s closing costs anytime prior to close, sometimes the amount of these charges changes right up to the closing date. Therefore, escrow collects the refundable pad as a safeguard to prevent a funding shortfall that would prevent escrow from closing. Don't worry, escrow will refund any excess funds after the transaction closes.