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A property is destroyed before escrow closes. Risk of loss would be _________(a) with the seller if possession had not passed and the loss was not due to the fault of the purchaser.(b) with the buyer if either possession or title has passed and not the fault of the seller. (c) with the escrow holder if not the fault of the buyer or seller. (d) both a and b are correct.

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Answer:

The correct answer is letter "D": both a and b are correct.

Explanation:

Escrow is a two-party financial agreement that usually involves a buyer and a seller. The buyer deposits money, securities or other funds into the escrow account where they are kept until they fulfill certain predefined requirements for both parties involved. The funds are then passed on to the seller.

If there is damage on the property, the risk loss is transferred to the buyer if the title has already been transferred to the buyer and if the damage is not the fault of the seller. If the seller still possesses the property's title, the damage must be covered by the seller in case the buyer is not involved in it.

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