Escrow & TitleIntermediateArizona Exam

In Arizona, an escrow officer's primary duty is to:

AAdvocate for the buyer's interests and review all seller-provided documents for accuracy, withholding disbursement from the escrow account until the buyer provides written approval of every condition

BAct as a neutral third party who follows the written instructions of both parties, holds funds and documents, and disburses them only when all conditions of the escrow instructions are satisfiedCorrect

CRepresent the lender's interests by confirming that all title conditions required by the loan commitment have been satisfied before releasing mortgage funds from the escrow account at closing

DProvide both parties with tax planning guidance and coordinate with their respective advisors to structure the closing in a way that minimizes each party's federal tax liability

Why Act as a neutral third party who follows the written instructions of both parties, holds funds and documents, and disburses them only when all conditions of the escrow instructions are satisfied Is Correct

Answer B: Act as a neutral third party who follows the written instructions of both parties, holds funds and documents, and disburses them only when all conditions of the escrow instructions are satisfied

An Arizona escrow officer is a neutral stakeholder—they hold funds and documents in trust for both parties and can only disburse or act according to the mutually agreed escrow instructions. They represent neither buyer nor seller but serve as an impartial conduit for the transaction.

Exam Tip: Escrow & Title

Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.

Key Escrow & Title Terms in This Question

Escrow

A neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.

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Key Terms to Know

Escrow

A neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.

Title Insurance

Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).

Abstract of Title

A condensed history of a property's title, summarizing all recorded documents and encumbrances affecting it from the earliest record to the present.

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