Trust Funds
When escrow is used in a California real estate transaction, trust funds are typically held by:
AThe listing broker's trust account until closing
BA neutral third-party escrow company✓ Correct
CThe seller's attorney in a trust account
DThe title insurance company on behalf of the DRE
Explanation
When an escrow is used, the buyer's earnest money and other funds are typically deposited directly into escrow with the escrow holder, rather than into the broker's trust account. The escrow company is a neutral third party that holds and disburses funds per the escrow instructions.
Related California Trust Funds Questions
- What records must a California broker maintain for their trust account?
- A broker who holds a disputed earnest money deposit and cannot get agreement from the parties may:
- 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:
- The illegal use of client trust funds for the broker's personal benefit is called:
- A broker's trust fund account must be reconciled:
- A broker who is also a property manager collects rent on behalf of an owner. These rental proceeds are:
- A broker may maintain a personal (broker's) funds balance in the trust account of up to how much to cover bank service charges?
- When a real estate transaction closes, how should trust funds (e.g., the buyer's deposit) be handled?
Practice More California Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free California Quiz →