How does Escrow work or What is Escrow anyway?

an Escrow is a government licensed organisation, nearly like a Bank.

They guaranteed the payment for your iPhone because we pay them the money before you even send us the iPhone.

Your money for your iPhone gets secured by them.
They act as a third party between the seller (you) and the buyer (SellTrade)

This way they reduce the risk of fraud and will only disburse the money for the iPhone when both Buyer and Seller are happy with the trade.

Easy as that!