Escrow & TitleIntermediateCalifornia Exam

In California, who may act as an escrow holder in a real estate transaction?

AAny licensed real estate agent, as typically handled by an escrow officer

BLicensed escrow companies, title companies, banks, savings associations, and attorneys (in certain situations)Correct

COnly title companies, consistent with standard title insurance practice

DOnly banks and savings institutions, per customary closing procedure in California

Why Licensed escrow companies, title companies, banks, savings associations, and attorneys (in certain situations) Is Correct

Answer B: Licensed escrow companies, title companies, banks, savings associations, and attorneys (in certain situations)

In California, entities licensed by the Department of Financial Protection and Innovation (DFPI) as escrow companies, licensed title insurers, banks, savings associations, and attorneys (under limited circumstances) may conduct escrow activities.

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.

People Also Study

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.

Chain of Title

The sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.

Deed

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

Study This Topic

Property Ownership Guide

Practice More California Real Estate Questions

1,500+ questions covering all exam topics. Start free — no signup required.

Take the Free California Quiz →