When escrow is used in a California real estate transaction, trust funds are typically held by:
Why A neutral third-party escrow company Is Correct
Answer B: A neutral third-party escrow company
Exam Tip: Trust Funds
Trust fund questions test the rules for handling client money. Know the deadlines for depositing trust funds, what constitutes commingling vs. conversion, and the penalties for violations.
Key Trust Funds Terms in This Question
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
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.
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
- A buyer's earnest money deposit is held in the broker's trust account. The sale falls through with no dispute. The broker may release the deposit:Trust Funds
- 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
- A broker receives a check as earnest money. Under California law, the broker must deposit it into the trust account within:Trust Funds
- Under California law, a real estate broker who manages property for clients must maintain a separate trust account for client funds. Mixing client funds with the broker's personal funds is called:Agency
- Real estate trust funds must be deposited into the trust account within how many business days of receipt?DRE & Licensing
- Under California law, the maximum amount a broker may keep of their own funds in a trust account (to cover bank service charges) is: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.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
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.
Right of First RefusalA contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
Math Concepts
State-Specific Concepts
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 →