REAL ESTATE CLOSING & SETTLEMENT LAW FINAL EXAM
PRACTICE QUESTIONS AND CORRECT ANSWER WITH
EXPLANATION LATEST 2025-2026
1. Closing in real estate refers to:
A. Property inspection
B. Final transfer of ownership
C. Appraisal process
D. Loan application
Answer: B
Rationale: Closing is when ownership is legally transferred.
2. Settlement is:
A. Property marketing
B. Final financial and legal completion of a sale
C. Insurance approval
D. Tax filing
Answer: B
Rationale: Settlement finalizes all obligations in a transaction.
3. The closing date is:
A. Inspection day
B. Date ownership transfers
C. Listing date
D. Appraisal date
Answer: B
Rationale: Legal transfer occurs on closing day.
4. The closing agent is responsible for:
,A. Appraisal
B. Managing the closing process
C. Marketing property
D. Lending money
Answer: B
Rationale: Oversees documents and funds exchange.
5. A title company typically:
A. Sets taxes
B. Handles title search and insurance
C. Appraises property
D. Approves loans
Answer: B
Rationale: Ensures clear ownership transfer.
6. Closing disclosure includes:
A. Property photos
B. Loan and closing costs
C. Insurance claims
D. Inspection reports
Answer: B
Rationale: Details all financial terms.
7. The buyer in closing is called:
A. Grantor
B. Grantee
C. Lender
D. Appraiser
Answer: B
Rationale: Buyer receives title.
8. The seller in closing is called:
, A. Grantee
B. Grantor
C. Broker
D. Inspector
Answer: B
Rationale: Seller transfers ownership.
9. Escrow is:
A. Property tax
B. Neutral holding of funds and documents
C. Appraisal value
D. Insurance policy
Answer: B
Rationale: Third-party holds funds until conditions are met.
10. Escrow agent acts as:
A. Buyer only
B. Neutral third party
C. Lender only
D. Broker only
Answer: B
Rationale: Manages closing funds and documents.
11. Earnest money is:
A. Loan fee
B. Buyer deposit showing good faith
C. Tax payment
D. Insurance premium
Answer: B
Rationale: Shows buyer commitment.
12. Earnest money is typically held in:
PRACTICE QUESTIONS AND CORRECT ANSWER WITH
EXPLANATION LATEST 2025-2026
1. Closing in real estate refers to:
A. Property inspection
B. Final transfer of ownership
C. Appraisal process
D. Loan application
Answer: B
Rationale: Closing is when ownership is legally transferred.
2. Settlement is:
A. Property marketing
B. Final financial and legal completion of a sale
C. Insurance approval
D. Tax filing
Answer: B
Rationale: Settlement finalizes all obligations in a transaction.
3. The closing date is:
A. Inspection day
B. Date ownership transfers
C. Listing date
D. Appraisal date
Answer: B
Rationale: Legal transfer occurs on closing day.
4. The closing agent is responsible for:
,A. Appraisal
B. Managing the closing process
C. Marketing property
D. Lending money
Answer: B
Rationale: Oversees documents and funds exchange.
5. A title company typically:
A. Sets taxes
B. Handles title search and insurance
C. Appraises property
D. Approves loans
Answer: B
Rationale: Ensures clear ownership transfer.
6. Closing disclosure includes:
A. Property photos
B. Loan and closing costs
C. Insurance claims
D. Inspection reports
Answer: B
Rationale: Details all financial terms.
7. The buyer in closing is called:
A. Grantor
B. Grantee
C. Lender
D. Appraiser
Answer: B
Rationale: Buyer receives title.
8. The seller in closing is called:
, A. Grantee
B. Grantor
C. Broker
D. Inspector
Answer: B
Rationale: Seller transfers ownership.
9. Escrow is:
A. Property tax
B. Neutral holding of funds and documents
C. Appraisal value
D. Insurance policy
Answer: B
Rationale: Third-party holds funds until conditions are met.
10. Escrow agent acts as:
A. Buyer only
B. Neutral third party
C. Lender only
D. Broker only
Answer: B
Rationale: Manages closing funds and documents.
11. Earnest money is:
A. Loan fee
B. Buyer deposit showing good faith
C. Tax payment
D. Insurance premium
Answer: B
Rationale: Shows buyer commitment.
12. Earnest money is typically held in:
