Housing and Community Development (HCD) Practice Exam

Which statement regarding manufactured home sales by dealers is correct?

1. Escrow is generally not needed for cash sales

2. Escrow is required only for permanent foundation placements

3. Escrow must be used during all manufactured home transactions

4. Escrow is exempt for quick cash sales

The correct answer is: Escrow is exempt for quick cash sales

In the context of manufactured home sales, when cash transactions occur, it is common for the parties involved to proceed without the need for an escrow service. Escrow typically serves to protect the interests of both the buyer and the seller by holding funds and documents until all conditions of the sale are satisfied. However, for quick cash sales, the urgency and simplicity of the transaction often lead to bypassing this process. Buyers and sellers may deem escrow unnecessary if they have a high level of trust or if the transaction is straightforward. The other statements address scenarios where escrow either is or is not required, but they do not accurately reflect the flexibility often allowed in cash transactions, especially in uncomplicated situations. As a result, the assertion regarding the exemption of escrow for quick cash sales aligns with the established practices in manufactured home transactions.