Under California law, which parties are required to sign the escrow instructions in a residential real estate transaction?
Correct Answer
D) Both the buyer and the seller, reflecting each party's obligations to the escrow holder
California law requires both the buyer and the seller to sign escrow instructions. The escrow holder acts as a neutral stakeholder serving both parties simultaneously, and its authority to act is derived from the written instructions of both sides. Escrow may be structured as bilateral instructions (one document signed by both parties) or as separate unilateral instructions from each party that must be consistent with one another. Either way, both parties must authorize the escrow holder's actions in writing.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Title insurance is a policy that protects the insured party against financial loss from defects in title that were not discovered during the title search. Unlike other insurance, it covers past events rather than future risks.
A title search is an examination of public records to determine the history of ownership, liens, encumbrances, and other interests affecting a property. It verifies that the seller has the legal right to transfer the property.
A transfer tax is a tax imposed by state, county, or local government on the transfer of real property from one owner to another. It is typically based on the sale price or a flat rate per dollar of consideration.
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- → A buyer records a deed at the county recorder's office. What is the primary purpose of recording?
- → A buyer drives past the property and sees someone other than the seller living there and maintaining the yard. This observation should put the buyer on what type of notice?
- → In a covered purchase transaction, the borrower receives a final form showing the loan terms, cash to close, and settlement charges shortly before consummation. What form is this?
- → Along with the signed offer, Quinn Brooks delivers a check to demonstrate serious intent to complete the transaction if the offer is accepted. What is this deposit called?
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A California escrow is closing on September 15. Annual property taxes of $8,400 were paid by the seller through June 30. Using a 360-day year (30 days per month), what is the correct tax proration entry on the closing statement?
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A non-U.S. resident is selling a California investment property for $900,000. The buyer does not intend to use the property as a personal residence. Under FIRPTA, what is the federal withholding amount the buyer must remit to the IRS?