What does 'escrow' mean in a California real estate transaction?
Why A neutral third party holding funds and documents until conditions are met Is Correct
Answer B: A neutral third party holding funds and documents until 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.
EscrowA 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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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
- When escrow is used in a California real estate transaction, trust funds are typically held by:Trust Funds
- In California, the escrow officer receives instructions from:Escrow & Title
- 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, escrow instructions that are signed by both buyer and seller create: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
- What is a 'neutral escrow' and when is it used for trust funds?Trust Funds
- Who selects the escrow company in California?Escrow & Title
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).
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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