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In an escrow closing, if a party tries to back out of the transaction after the deed is deposited with the escrow agent

A. the escrow agent will follow the instructions of the party with the change of mind.

B. the escrow agent will nonetheless deliver the deed to the purchaser upon the happening of the conditions specified in the agreement.

C. the escrow agent will automatically return the deed to the seller and terminate the transaction.

D. the purchase contract will be terminated, and the parties will return to their positions.

1 Answer

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Final answer:

In an escrow closing, the escrow agent must adhere to the original escrow agreement terms and deliver the deed to the buyer once conditions are met, regardless of any party's change of mind. Termination or alteration of the escrow terms requires mutual consent or legal intervention.

Step-by-step explanation:

In an escrow closing, the escrow agent has a fiduciary duty to follow the instructions set forth in the escrow agreement. Typically, once a deed is deposited with the escrow agent, the transaction moves towards closure upon the fulfillment of specified conditions. If a party wishes to back out after the deed has been deposited, the escrow agent cannot simply follow the change-of-mind instructions from that party. Instead, the escrow agent will typically continue to process the escrow as per the initial agreement and deliver the deed to the purchaser once all conditions are met.

Only upon mutual agreement of both parties, or if legally justified through a court order or similar legal process, can the terms of the escrow be altered, or the transaction be terminated. In such a case, the possible outcome might be that both parties return to their original positions, or one party may face legal consequences for breach of contract.

However, without such agreement or legal intervention, the escrow agent's role is strictly to adhere to the terms of the original agreement.

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