Final answer:
Closing costs are the expenses the buyer and seller pay to close a real estate transaction, including various fees like surveys and taxes. Escrow is a service that holds funds securely until a transaction is complete and also helps homeowners manage property taxes and home insurance payments. Option c
Step-by-step explanation:
The correct answer to the question regarding expenses paid by the buyer and seller to close a real estate transaction is C. Closing costs. These are various fees and expenses, on top of the price of the property, that buyers and sellers normally incur to complete a real estate transaction. Closing costs may include loan origination fees, title insurance, surveys, taxes, and credit report charges.
On the topic of escrow, it is an arrangement where a third party holds and regulates the payment of funds required for two parties involved in a given transaction. It helps make transactions more secure by keeping the payment in a secure escrow account which is only released when all of the terms of an agreement are met.
It's important to note that an escrow account can also be used by homeowners to set aside money for property taxes and home insurance.
The third party managing the escrow account will pay these expenses on behalf of the homeowner, which helps to simplify and consolidate payments. Rather than paying separately for insurance and taxes, the homeowner makes a monthly payment to the escrow account, and the escrow service takes care of the rest. option c