Oregon Real Estate Practice Test 2025 – Your All-in-One Guide to Exam Success!

The primary purpose of an escrow account in real estate transactions is to hold funds and documents until all transaction terms are met. This process ensures that both the buyer and seller meet their obligations before the sale is finalized. When a buyer makes an offer on a property, an earnest money deposit is typically placed in the escrow account. This deposit demonstrates the buyer's serious intent to purchase the property and is held securely until various conditions, such as inspections or financing approval, are satisfied.

Once all terms of the contract are fulfilled, the escrow agent disburses the funds and documents appropriately, facilitating a smooth transfer of ownership. By holding the funds and documents, the escrow process helps protect both parties in the transaction by ensuring that no money changes hands and no legal documents are exchanged until all agreed-upon conditions are completed. This minimizes the risk of disputes and provides an organized method for handling the complexities involved in real estate transactions.