California Real Estate Practice Exam

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What is true regarding a change to a house sale transaction that is now in escrow, if Seller A informs the escrow agent of the change by phone?

The change will be effective immediately
The change needs to be acknowledged by the escrow agent only
The change will not be effective unless it is put in writing by both parties
The change is effective if the buyer agrees verbally

The correct answer is: The change will not be effective unless it is put in writing by both parties

In a real estate transaction, especially when it is in escrow, maintaining clarity and legal integrity is paramount. When a change is communicated by phone, it typically lacks the formal documentation that is often required to solidify agreements or changes. For a change to take effect officially, it is crucial that it be documented in writing and acknowledged by both parties involved in the transaction. This ensures that there is a clear record of the change and helps in avoiding any misunderstandings that could arise from verbal agreements. This requirement for written confirmation is part of the standard practice in real estate transactions, as it protects the interests of both the buyer and seller and provides a reliable reference point if any disputes arise later on. Thus, for the change to be legally recognized, both parties' written consent is necessary.