In escrow, who acts as a neutral depository for documents and money for both principals?

Study for the California Escrow Exam. Dive into detailed content with flashcards and multiple choice questions, accompanied by explanations and hints. Ensure your success on test day!

Escrow holders are the neutral third parties in a real estate escrow. They securely hold both funds and documents for all parties and release them only when the escrow instructions are met, ensuring impartiality and proper handling of the closing terms. This neutrality protects both buyer and seller, since they have opposing interests, while the lender, buyer, or seller themselves are not suited to serve as the safe, unbiased depository. The escrow holder’s fiduciary duty and independence make them the proper guardian of the money and papers until closing conditions are fulfilled.