Escrow & TitleIntermediateCalifornia Exam

In California, the escrow officer receives instructions from:

AOnly the seller, consistent with standard title insurance practice

BOnly the buyer's lender, per customary closing procedure in California

CBoth the buyer and seller (and sometimes the lender)Correct

DOnly the real estate agents, under standard California escrow and title practice

Why Both the buyer and seller (and sometimes the lender) Is Correct

Answer C: Both the buyer and seller (and sometimes the lender)

The escrow officer receives instructions from all parties to the transaction — buyer, seller, and lender — and acts as a neutral party to carry out those mutual instructions when all conditions are satisfied.

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

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.

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.

Deed of Trust

A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.

Deed

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

Easement

A non-possessory right to use another person's land for a specific purpose.