After the contract is signed by both buyer and seller, who owns escrow funds?

Study for the Florida Mutual Recognition Test. Use flashcards and multiple choice questions, each with hints and explanations. Prepare thoroughly for your exam!

Multiple Choice

After the contract is signed by both buyer and seller, who owns escrow funds?

Explanation:
Escrow funds are held in a trust account by the broker or escrow agent and are not the broker’s property. They represent the consideration from the contract and are intended to be applied to the sale under the terms of the agreement. Because these funds are part of the deal and are to be released to the seller at closing (or returned/allocated if the contract terminates), both the buyer and the seller have an interest in them while they’re in escrow. The broker simply holds the funds in trust and doesn’t own them.

Escrow funds are held in a trust account by the broker or escrow agent and are not the broker’s property. They represent the consideration from the contract and are intended to be applied to the sale under the terms of the agreement. Because these funds are part of the deal and are to be released to the seller at closing (or returned/allocated if the contract terminates), both the buyer and the seller have an interest in them while they’re in escrow. The broker simply holds the funds in trust and doesn’t own them.

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