Escrow & Title
In Washington, when is the escrow agent authorized to release the buyer's earnest money to the seller after a buyer default?
AImmediately upon notification of default by the seller
BOnly with mutual written instructions from both buyer and seller, or by court order✓ Correct
CAutomatically after 30 days of the default
DAt the escrow agent's discretion based on the circumstances
Explanation
Escrow agents in Washington are neutral parties who can only disburse funds with written mutual instructions from all parties, or pursuant to a court order. The escrow agent cannot unilaterally release earnest money to either party based solely on one party's claim of default.
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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.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
ProrationThe division of ongoing property expenses (taxes, HOA dues, rents) between buyer and seller at closing based on their respective days of ownership.
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