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Real Estate Salesperson Exam — National Portion

Closing and settlement: practice questions

Our Real Estate (National) bank has 12 questions on this topic. Here are 5 of them with answers; the full mock exam draws from every topic, like the real one.

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Question 1

What is escrow?

  1. A title defect
  2. An arrangement where a neutral third party holds funds and documents until conditions are met
  3. A listing agreement
  4. A type of mortgage
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B. An arrangement where a neutral third party holds funds and documents until conditions are met — The escrow agent follows written instructions.

Question 2

What is a home inspection?

  1. An appraisal of the property's market value for the buyer's lender
  2. An examination of a property's condition by a qualified inspector
  3. A zoning review
  4. A title search
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B. An examination of a property's condition by a qualified inspector — Usually a buyer contingency.

Question 3

What does homeowners insurance cover?

  1. Title defects
  2. Damage to the home and personal property from covered perils, and liability
  3. Market value decline
  4. Mortgage default
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B. Damage to the home and personal property from covered perils, and liability — Lenders require it.

Question 4

What is a final walk-through?

  1. The appraisal
  2. The title search
  3. The loan application
  4. The buyer's inspection of the property shortly before closing to confirm its condition
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D. The buyer's inspection of the property shortly before closing to confirm its condition — It confirms agreed repairs and that items remain.

Question 5

What is a prorated item at closing?

  1. The commission
  2. The purchase price
  3. An expense or income divided between buyer and seller based on the closing date
  4. The earnest money
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C. An expense or income divided between buyer and seller based on the closing date — Taxes, rent and HOA dues are commonly prorated.

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