What Is Escrow?
A neutral third party holds funds or documents on behalf of a buyer and seller until all conditions of the transaction are satisfied, then disburses them accordingly.
Escrow across 6 exams
Escrow appears on the following exams. Each defines it in the context candidates are tested on:
- Real Estate
- A neutral third party holds funds or documents on behalf of a buyer and seller until all conditions of the transaction are satisfied, then disburses them accordingly.
- Series 63
- A third-party account holding customer funds or securities until specified conditions are met. Broker-dealers must maintain customer funds and securities in escrow or trust accounts to protect against the firm's creditors and ensure customer assets are properly segregated.
- CA Salesperson
- A neutral third party holds funds, documents, and instructions on behalf of the buyer and seller until all conditions of a transaction are met. Escrow ensures neither party gains an advantage until the deal closes.
- CA Broker
- A neutral third-party arrangement that holds funds and documents until all conditions of a real estate transaction are satisfied and the sale can close.
- AZ Salesperson
- A neutral third-party arrangement that holds funds and documents on behalf of the buyer and seller until all conditions of the transaction are met, then disburses them at closing.
- IL Broker
- An arrangement in which a neutral third party holds funds or documents on behalf of the transacting parties until agreed-upon conditions are met. Earnest money is commonly held in an escrow account.