Escrow / Trust Account
A separate account where money belonging to others is held apart from a broker's own funds, often at the title company in a Texas sale.
Quick flashcard
What does Escrow / Trust Account mean on the Texas real estate exam?
Answer: A separate account where money belonging to others is held apart from a broker's own funds, often at the title company in a Texas sale.
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Escrow / Trust Account definition
An escrow or trust account holds money that belongs to others, such as a buyer's earnest money, separate from a broker's personal and business funds. In most Texas residential transactions, the earnest money is held by a neutral escrow agent named in the contract, commonly a title company, rather than by the broker.
When a Texas broker does hold money for others, the broker must keep it in a trust account and disburse it only as authorized. Mixing trust money with the broker's own funds is commingling, and using trust money for the broker's benefit is conversion.
Source basis
Definition checked against the official sources below on .
On the exam
Exam trap
Tested in
Standards of Conduct (9 of 40 Texas State Law)
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Try 5 free questionsThis definition is Texas real estate exam-prep education, not legal, tax, or professional advice. Verify current rules against the official source before relying on them for a real transaction. Back to the full glossary.