A California buyer's agent explains the concept of 'split escrow' to her client. In California, what does the term 'split escrow' refer to?
Correct Answer
C) An escrow where the buyer and seller each submit separate, independent escrow instructions to the same escrow company
In California, a 'split escrow' (also called bilateral escrow) refers to a situation where the buyer and seller each provide separate, independent sets of escrow instructions to the escrow company. This is in contrast to a 'joint' or 'unilateral' escrow where both parties sign a single set of instructions. Both approaches are used in California, with the choice often depending on local custom.
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Previous Question
An escrow officer in Sacramento is prorating the seller's homeowner association (HOA) dues at closing. The quarterly HOA dues are $1,800, payable on January 1, April 1, July 1, and October 1. The seller has paid the current quarter (April 1 through June 30). The closing date is May 15. Using a 30-day month, how much credit is the buyer owed for the HOA dues the seller has prepaid beyond the closing date?
Next Question
A California escrow is nearing closing. The buyer's lender has approved the loan and sent the loan documents to escrow. The escrow officer discovers that the buyer has not yet obtained homeowner's insurance, which is a lender requirement. What action should the escrow officer take?