Contracts, Transfer, and Escrow Practice Question
Question
A listing agent notices a potential compliance issue involving escrow instructions. The parties need a practical answer before moving forward. Which answer best applies the rule? (Item 133)
Answer choices
- A. Recognize neutral third-party handling of documents and funds under instructions.
- B. It is valid only when the buyer pays cash and no lender is involved.
- C. It prevents any later disclosure, even when new facts become known.
- D. It applies only to commercial property and never to residential transactions.
Correct Answer
A. Recognize neutral third-party handling of documents and funds under instructions.
Explanation
The correct answer is A because escrow instructions requires candidates to recognize neutral third-party handling of documents and funds under instructions. The other options overstate the effect of custom, oral agreement, escrow, or independent salesperson action and do not reflect safe California exam practice.
Question details
- Difficulty: easy
- Domain: Contracts, Transfer, and Escrow
- Objective: escrow instructions