Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

Which entity do most Texas licensees prefer to hold patient funds in an escrow account?

1. A financial institution

2. A licensed attorney

3. A title company

4. A real estate brokerage

The correct answer is: A title company

Most Texas licensees prefer to hold patient funds in an escrow account with a title company because title companies provide a secure and regulated environment for managing these funds. Title companies are specifically established to facilitate real estate transactions and are equipped with the necessary systems and protocols to handle escrow accounts effectively. Additionally, title companies are governed by strict state regulations, ensuring that they properly safeguard the funds until they are released according to the terms of the transaction. This assurance of compliance is critical for licensees, who need to maintain trust and transparency with their clients. While financial institutions, licensed attorneys, and real estate brokerages can also handle escrow accounts, title companies have become the preferred choice due to their specialized focus and expertise in real estate transactions. They often have established relationships with various parties involved in the transaction, which can streamline the process and enhance coordination.