What is an Escrow Account? - Definition & Rules


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question 1 of 3

Tom, Dick and Harry are in an escrow arrangement. Tom is buying a house from Dick, and Harry is acting as a neutral third party that will hold the deed and money. What do we call Harry?

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1. Calvin not only has to make a loan payment every month but also escrow payments for insurance and taxes. Which of the following is the most precise name we can call Calvin's payment?

2. Which of the following cannot be placed into escrow?

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About This Quiz & Worksheet

Escrow accounts are essential parts of real estate transactions, and this quiz and worksheet will help you check your understanding of how escrow applies to real estate. Quiz questions will focus on how escrow accounts work and key terms associated with them.

Quiz & Worksheet Goals

This pair of assessments will quiz you on:

  • An example illustrating escrow's role in real estate
  • Term for a payment that includes insurance and taxes
  • Items that cannot be placed in escrow
  • Reason for lenders to require escrow
  • How escrow agents know to release the property

Skills Practiced

  • Reading comprehension - make sure you comprehend key information from the related escrow lesson
  • Information recall - access the knowledge you've gained regarding the necessity for escrow accounts
  • Knowledge application - employ your knowledge to answer questions about components of real estate transactions

Additional Learning

If you want to find out more about escrow, read the corresponding lesson titled What is an Escrow Account? - Definition & Rules. The lesson will go over the following key topics:

  • Examples and explanations of escrow and real estate transactions
  • Payments for principal, interest, taxes, and insurance
  • Consequences of failing to pay property taxes