What is the primary function of escrow in a California real estate transaction?
Why To act as a neutral third party that holds funds and documents and carries out the instructions of buyer, seller, and lender until all conditions are met Is Correct
Answer B: To act as a neutral third party that holds funds and documents and carries out the instructions of buyer, seller, and lender until all conditions are 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
A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Title InsuranceInsurance 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 TitleThe sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
People Also Study
Related California Questions
- Under California law, a real estate broker must deposit trust funds received into a neutral escrow or into the broker's trust fund account no later than:Trust Funds
- In California, who typically acts as the escrow holder in a real estate transaction?Escrow & Title
- In California, what is the minimum time from recording the Notice of Default (NOD) to a non-judicial trustee's sale?Finance
- In California, when a married couple acquires real property during marriage with community funds and takes title as 'community property with right of survivorship,' what is the primary advantage over joint tenancy?Property Ownership
- In California, what happens to a joint tenancy when one joint tenant conveys their interest to a third party without the other joint tenants' knowledge?Property Ownership
- In California, an escrow holder is considered a dual agent for both buyer and seller. This means the escrow holder:Escrow & Title
- Under California's race-notice recording statute, a subsequent purchaser prevails over a prior unrecorded deed if the subsequent purchaser:Escrow & Title
- When a real estate broker receives a deposit check from a buyer, California law requires the broker to place the funds in a trust account or deliver them to the escrow within:DRE & Licensing
Key Terms to Know
A neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Abstract of TitleA condensed history of a property's title, summarizing all recorded documents and encumbrances affecting it from the earliest record to the present.
Study This Topic
Practice More California Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free California Quiz →