What happens to escrow funds if a broker does not maintain an escrow account?

When a broker does not maintain an escrow account, the funds can still be safeguarded by using an alternative method of holding the funds, such as a title company or an attorney’s trust account. This is a common practice to ensure that the buyer's funds are protected while the transaction is being processed. Title companies and attorneys are often licensed to hold such funds in a trust capacity, which provides the same level of protection and segregation that an escrow account would offer.

The importance of maintaining secure handling of escrow funds can't be understated, as it helps to build trust in the transaction process. It is critical to have guidelines and regulations in place to protect clients' funds, and having a title company or attorney as an intermediary can serve that purpose effectively.