Manufactured Housing Practice Test

What does an escrow agent do if a buyer doesn’t respond during a dispute?

1. Close the escrow immediately

2. Return funds to the dealer

3. Hold all funds until further notice

4. Release funds to the buyer

The correct answer is: Hold all funds until further notice

An escrow agent's primary role is to act as a neutral third party who holds funds and documents related to a transaction until all conditions for the deal are met. In situations where a dispute arises and one party, such as the buyer, does not respond, it is essential for the escrow agent to maintain the status quo to protect all parties involved. Holding all funds until further notice ensures that no party is disadvantaged while the dispute is being resolved. This action prevents premature release of funds that could lead to complications or losses for either party. The escrow agent's responsibility is to ensure that the transaction is handled fairly and according to the terms agreed upon by both parties, which further emphasizes the importance of holding the funds during unresolved disputes. Other choices may suggest closing escrow, returning funds, or releasing them without proper resolution, which could lead to unfair outcomes or legal complications. Therefore, the correct approach is to hold all funds until further notice, ensuring a fair resolution can be achieved.