To make it short, you (Bob) in this case, want to trade Fiat, for Alice's XMR, in person. BOTH you and Alice need to put in some monero into the trade, as a security deposit. That is so in case if you try to scam Alice, you will loose something in the process, preventing you from trying to repeatedly scam people, and vice versa.
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+Sidenote: if you want to get your first monero and you don't have any crypto / fiat to start with, check out the "earn XMR" section in xmrbazaar.com. For example, i offer monero to whoever contributes new blogposts to the OPSEC section of my blog in this offer here.
Due to the 2/3 multisig nature of the trade, there needs to be at least 2 agreeing parties to complete the trade. If all goes well, you and Alice agree on the trade, and the security deposit monero is released. If not, the Arbitrator will step in to punish the wrongdoer (by not giving him the security deposit back), and give the security deposit to the honest party.
The following example will cover a successful trade between you and Alice. If you want to see a trade dispute, check out this tutorial.
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