What must occur before an escrow can close according to the Hawaii Good Funds Act?

What must occur before an escrow can close according to the Hawaii Good Funds Act?

• A. Certified checks must be available in escrow
• B. All payments must be made in cash
• C. All certified or cashier's checks have cleared and lender's funds are on deposit
• D. Escrow can close immediately if the buyer agrees

Answer: (C)

The correct answer is that all certified or cashier's checks have cleared and lender's funds are on deposit before an escrow can close according to the Hawaii Good Funds Act. This requirement is in place to ensure that all funds involved in the transaction are available and secure, preventing any potential issues related to insufficient funds. The act emphasizes the importance of having verified and cleared funds to protect all parties involved in the transaction, including buyers, sellers, and lenders. Having all certified or cashier's checks cleared ensures that the funds are legitimate and available for disbursement. It also establishes a level of trust in the transaction, as it mitigates the risk of fraud or payment disputes that could arise if checks have not yet cleared. Likewise, ensuring that lender's funds are on deposit confirms that financing is secured before concluding the sale, providing a smoother transition to closing. Other options do not align with the requirements set forth by the Hawaii Good Funds Act. For example, while certified checks are reliable forms of payment, requiring them solely to be 'available in escrow' does not address the necessity of their clearance or the need for lender funds, making it insufficient. Similarly, stating that all payments must be made in cash or that escrow can close immediately with the buyer’s consent does

The correct answer is that all certified or cashier's checks have cleared and lender's funds are on deposit before an escrow can close according to the Hawaii Good Funds Act. This requirement is in place to ensure that all funds involved in the transaction are available and secure, preventing any potential issues related to insufficient funds. The act emphasizes the importance of having verified and cleared funds to protect all parties involved in the transaction, including buyers, sellers, and lenders.

Having all certified or cashier's checks cleared ensures that the funds are legitimate and available for disbursement. It also establishes a level of trust in the transaction, as it mitigates the risk of fraud or payment disputes that could arise if checks have not yet cleared. Likewise, ensuring that lender's funds are on deposit confirms that financing is secured before concluding the sale, providing a smoother transition to closing.

Other options do not align with the requirements set forth by the Hawaii Good Funds Act. For example, while certified checks are reliable forms of payment, requiring them solely to be 'available in escrow' does not address the necessity of their clearance or the need for lender funds, making it insufficient. Similarly, stating that all payments must be made in cash or that escrow can close immediately with the buyer’s consent does