Question 19

Banks, brokers, and attorneys can hold escrow accounts.

Escrow accounts can be held by banks, brokers, and attorneys, as these entities are typically involved in managing funds during real estate transactions or other agreements requiring third-party management of funds.

A) Lenders, brokers, and real estate commissions

This option is incorrect because while brokers can hold escrow accounts, lenders and real estate commissions do not typically manage escrow funds. Lenders primarily deal with financing, and commissions are fees rather than entities that manage funds.

B) Banks, salespersons, and title companies

While banks can hold escrow accounts, salespersons are not authorized to manage such accounts. Title companies can sometimes handle escrow, but this option incorrectly includes salespersons, making it an inaccurate choice.

C) Banks, brokers, and attorneys

This option is correct as banks are financial institutions that can securely hold funds, brokers are licensed professionals in real estate transactions who can manage escrow, and attorneys are often involved in legal aspects of transactions and can oversee escrow accounts.

D) Salespersons, brokers, and lenders

This option is incorrect because, although brokers can hold escrow accounts, salespersons do not have the authority to manage such funds, and lenders typically are not involved in escrow management.

Conclusion

The correct answer is C, as it accurately identifies entities that are authorized to manage escrow accounts, which is crucial in real estate and legal transactions. Options A, B, and D fail to include the appropriate entities or include roles that do not typically manage escrow funds, demonstrating a misunderstanding of escrow account management.