====== Escrow ======

**Escrow** is a **neutral arrangement** in which a **disinterested third party** holds funds, documents, and instructions until the conditions of a real estate transaction are fulfilled.

===== Key Characteristics =====
  * Involves **three parties**: buyer, seller, and escrow holder
  * Escrow holder is a **neutral agent**
  * Acts only on **written escrow instructions**
  * Ensures proper **transfer of funds and documents**

===== Purpose of Escrow =====
  * Protects all parties to the transaction
  * Ensures conditions are met before closing
  * Facilitates orderly transfer of title

===== Escrow Holder Duties =====
  * Follow escrow instructions exactly
  * Safeguard funds and documents
  * Prorate taxes, rents, and insurance
  * Record necessary documents at closing
  * Disburse funds when conditions are met

===== Escrow in California =====
  * Escrow may be handled by a **title company**, **escrow company**, or **licensed attorney**
  * Escrow is **not a fiduciary**, but owes a duty of **care and neutrality**

===== Opening and Closing Escrow =====
  * **Open escrow**: parties deposit documents and funds
  * **Close escrow**: all conditions satisfied and documents recorded

===== Exam Tip =====
  * Escrow follows **instructions**, not discretion
  * Escrow protects the transaction, not one party