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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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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