Escrow & TitleIntermediateArizona Exam

In Arizona, the escrow holder (title/escrow company) acts as:

AAn agent of the buyer's lender who holds documents and funds on the lender's behalf to ensure loan security interests are properly perfected before disbursement
BA neutral third party holding funds and documents and following the written escrow instructions of all partiesCorrect
CA licensed attorney representing the interests of the most financially sophisticated party, which Arizona law presumes to be the institutional lender
DA dual agent who simultaneously represents the buyer and seller and owes each party a limited fiduciary duty to protect their financial interests at closing

Why A neutral third party holding funds and documents and following the written escrow instructions of all parties Is Correct

Answer B: A neutral third party holding funds and documents and following the written escrow instructions of all parties

The escrow holder is a neutral, disinterested third party who holds funds and documents, follows written instructions from buyer, seller, and lender, and disburses funds and records documents only when all conditions have been met.

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

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