Nevada Escrow Officer Licensing
Examination Exam Practice Questions
And Correct Answers (Verified Answers)
Plus Rationales 2026 Q&A | Instant
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1. What is the primary role of an escrow officer in a real estate
transaction?
A. Drafting property deeds
B. Representing the buyer in negotiations
C. Acting as a neutral third party to handle funds and documents
D. Providing legal advice to the seller
Rationale: The escrow officer serves as a neutral intermediary,
ensuring that funds and documents are handled according to the
terms of the contract without representing either party.
2. Which Nevada statute primarily governs escrow practices?
A. Nevada Business and Professions Code Chapter 645B
B. Nevada Revised Statutes Chapter 645C
C. Nevada Revised Statutes Chapter 645B
D. Nevada Real Estate License Law Chapter 645
Rationale: NRS Chapter 645B specifically regulates escrow agents
and their licensing, ensuring compliance with state standards.
3. What type of account must an escrow officer maintain for client
funds?
A. Personal savings account
B. General operating account
C. Segregated trust account
D. Investment account
, Rationale: Client funds must be kept separate from the escrow
officer’s own funds in a trust account to protect the clients and
maintain compliance with NRS requirements.
4. When is an escrow officer allowed to disburse funds?
A. Immediately upon receipt
B. Only after verbal instructions from the buyer
C. Only according to the terms of the escrow instructions
D. At the discretion of the escrow officer
Rationale: Funds must be disbursed strictly according to escrow
instructions to ensure legal compliance and prevent liability.
5. Which document initiates an escrow in Nevada?
A. Grant deed
B. Promissory note
C. Purchase agreement or escrow instructions
D. Mortgage disclosure statement
Rationale: Escrow begins once the buyer and seller execute a
purchase agreement or specific escrow instructions directing the
escrow officer’s duties.
6. An escrow officer must complete a reconciliation of trust accounts:
A. Annually only
B. Monthly or as required by the Nevada Division of Real Estate
C. Weekly only
D. Every five years
Rationale: Regular reconciliation ensures that client funds are
accounted for and safeguards against errors or misappropriation.
7. Which party typically pays the escrow fees in a Nevada real estate
transaction?
A. Seller only
B. Buyer only
C. As agreed in the purchase agreement, often shared
D. The escrow officer
Rationale: Escrow fees are negotiated between the parties and can
be allocated to either party or shared according to the purchase
agreement.
, 8. How long must escrow records be retained under Nevada law?
A. 1 year
B. 2 years
C. 5 years
D. 3 years
Rationale: NRS 645B requires escrow agents to retain records for at
least three years to ensure compliance and facilitate audits.
9. Which action by an escrow officer could be considered a violation of
Nevada law?
A. Maintaining trust account records
B. Using client funds for personal expenses
C. Following written escrow instructions
D. Disclosing transaction status to both parties
Rationale: Misusing client funds is a breach of fiduciary duty and a
violation of NRS 645B, subject to disciplinary action.
10. What is an “escrow instruction”?
A. A type of mortgage
B. A written document outlining the duties, conditions, and
instructions for disbursing funds and documents
C. A loan application
D. A property appraisal
Rationale: Escrow instructions provide the escrow officer with legally
binding directions for handling a transaction, protecting both parties.
11. When a dispute arises between buyer and seller, the escrow
officer should:
A. Decide the outcome independently
B. Follow written escrow instructions or seek legal guidance
C. Release funds to the seller immediately
D. Cancel the escrow unilaterally
Rationale: The escrow officer must remain neutral and adhere to the
written instructions or obtain legal advice rather than resolving
disputes independently.
12. In Nevada, which is required before an escrow officer can
receive a license?
A. 10 years of real estate experience
Examination Exam Practice Questions
And Correct Answers (Verified Answers)
Plus Rationales 2026 Q&A | Instant
Download Pdf
1. What is the primary role of an escrow officer in a real estate
transaction?
A. Drafting property deeds
B. Representing the buyer in negotiations
C. Acting as a neutral third party to handle funds and documents
D. Providing legal advice to the seller
Rationale: The escrow officer serves as a neutral intermediary,
ensuring that funds and documents are handled according to the
terms of the contract without representing either party.
2. Which Nevada statute primarily governs escrow practices?
A. Nevada Business and Professions Code Chapter 645B
B. Nevada Revised Statutes Chapter 645C
C. Nevada Revised Statutes Chapter 645B
D. Nevada Real Estate License Law Chapter 645
Rationale: NRS Chapter 645B specifically regulates escrow agents
and their licensing, ensuring compliance with state standards.
3. What type of account must an escrow officer maintain for client
funds?
A. Personal savings account
B. General operating account
C. Segregated trust account
D. Investment account
, Rationale: Client funds must be kept separate from the escrow
officer’s own funds in a trust account to protect the clients and
maintain compliance with NRS requirements.
4. When is an escrow officer allowed to disburse funds?
A. Immediately upon receipt
B. Only after verbal instructions from the buyer
C. Only according to the terms of the escrow instructions
D. At the discretion of the escrow officer
Rationale: Funds must be disbursed strictly according to escrow
instructions to ensure legal compliance and prevent liability.
5. Which document initiates an escrow in Nevada?
A. Grant deed
B. Promissory note
C. Purchase agreement or escrow instructions
D. Mortgage disclosure statement
Rationale: Escrow begins once the buyer and seller execute a
purchase agreement or specific escrow instructions directing the
escrow officer’s duties.
6. An escrow officer must complete a reconciliation of trust accounts:
A. Annually only
B. Monthly or as required by the Nevada Division of Real Estate
C. Weekly only
D. Every five years
Rationale: Regular reconciliation ensures that client funds are
accounted for and safeguards against errors or misappropriation.
7. Which party typically pays the escrow fees in a Nevada real estate
transaction?
A. Seller only
B. Buyer only
C. As agreed in the purchase agreement, often shared
D. The escrow officer
Rationale: Escrow fees are negotiated between the parties and can
be allocated to either party or shared according to the purchase
agreement.
, 8. How long must escrow records be retained under Nevada law?
A. 1 year
B. 2 years
C. 5 years
D. 3 years
Rationale: NRS 645B requires escrow agents to retain records for at
least three years to ensure compliance and facilitate audits.
9. Which action by an escrow officer could be considered a violation of
Nevada law?
A. Maintaining trust account records
B. Using client funds for personal expenses
C. Following written escrow instructions
D. Disclosing transaction status to both parties
Rationale: Misusing client funds is a breach of fiduciary duty and a
violation of NRS 645B, subject to disciplinary action.
10. What is an “escrow instruction”?
A. A type of mortgage
B. A written document outlining the duties, conditions, and
instructions for disbursing funds and documents
C. A loan application
D. A property appraisal
Rationale: Escrow instructions provide the escrow officer with legally
binding directions for handling a transaction, protecting both parties.
11. When a dispute arises between buyer and seller, the escrow
officer should:
A. Decide the outcome independently
B. Follow written escrow instructions or seek legal guidance
C. Release funds to the seller immediately
D. Cancel the escrow unilaterally
Rationale: The escrow officer must remain neutral and adhere to the
written instructions or obtain legal advice rather than resolving
disputes independently.
12. In Nevada, which is required before an escrow officer can
receive a license?
A. 10 years of real estate experience
