In this chapter,

(1) “depository escrow account” means an account that holds escrow money pending completion of an escrow transaction and that is in a financial institution;

(2) “escrow money” means the money that is received by a settlement agent for an escrow transaction;

(3) “escrow transaction” means a transaction where, for the purpose of effecting and closing the sale, purchase, exchange, transfer, encumbrance, leasing, or other disposition of an interest in a single piece of residential real property, persons agree that

(A) money, written documents, evidence of title to real or personal property, or other things of value will be delivered to a person for retention until the happening of a specific event or the performance of a prescribed condition; and

(B) upon the happening of the event or performance of the condition, the person holding the things of value will deliver them to the persons entitled to them under the escrow transaction agreement;

(4) “financial institution” means a financial institution

(A) whose accounts are insured by an agency of the federal government;

(B) that is located in this state and does not meet the requirements of (A) of this paragraph, but is subject to regulation by the Department of Commerce, Community, and Economic Development; or

(C) that is located in another state and does not meet the requirements of (A) of this paragraph, but is subject to regulation in the other state by an agency comparable to the Department of Commerce, Community, and Economic Development;

(5) “item” means cash, a check, a negotiable order of withdrawal, a share draft, a traveler's check, a money order, or an interbank electronic transfer; in this paragraph, “check” includes a cashier's check;

(6) “residential real property” means real property on which there are one to four attached or detached dwelling units, or any number of apartments if the apartments are in a horizontal property regime formed under AS 34.07 or any number of units if the units are in a common interest community created under AS 34.08; “residential real property” includes a manufactured home that has become real property under AS 34.85.010; in this paragraph, “manufactured home” has the meaning given in AS 45.29.102;

(7) “settlement agent” means a person who handles an escrow transaction for compensation, but does not mean a financial institution or other person when the financial institution or other person collects money for the sole purpose of applying the money to the payment of an indebtedness; “settlement agent” includes an employee of a person who handles an escrow transaction for compensation when the employee is carrying out employment duties related to the escrow transaction.