Escrow & Title
In New Mexico, 'escrow' in a real estate transaction refers to:
AThe buyer's down payment only
BA neutral arrangement where funds and documents are held by a third party until all conditions of the sale are met✓ Correct
CThe title insurance policy
DThe lender's approval
Explanation
Escrow is a neutral third-party arrangement (handled by a title company, escrow company, or attorney in NM) where funds, deed, and documents are held and disbursed only when all contractual conditions have been fulfilled.
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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.
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.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
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