Nevada Escrow Agent Licensing Exam
Practice Questions And Correct Answers
(Verified Answers) Plus Rationales 2026
Q&A | Instant Download Pdf
1. Which of the following best describes an escrow agent’s primary duty?
A. Representing the buyer in negotiations
B. Representing the seller in negotiations
C. Acting as a neutral third party to facilitate a transaction
D. Providing legal advice to parties
Rationale: The primary duty of an escrow agent is to act as an impartial
intermediary, ensuring that all contractual obligations are met before
funds or property are transferred.
2. Under Nevada law, escrow agents are required to deposit all funds
received into:
A. Their personal checking account
B. A trust account maintained for escrow purposes
C. A general business account
D. An investment account
Rationale: Escrow funds must be kept in a separate trust account to
prevent commingling with personal or business funds, ensuring proper
protection of clients’ money.
3. What document initiates the escrow process?
A. Deed of trust
B. Escrow instructions
, C. Purchase agreement
D. Title report
Rationale: Escrow instructions, agreed upon by all parties, formally
establish the duties of the escrow agent and outline the conditions for
closing the transaction.
4. Which of the following is required for an escrow agent to maintain
licensure in Nevada?
A. Annual federal tax filing
B. Surety bond or errors and omissions insurance
C. Maintaining a minimum of $50,000 in the business account
D. Continuing legal education
Rationale: Nevada law requires escrow agents to have a surety bond or
insurance to protect against negligence or misconduct in handling escrow
funds.
5. When may an escrow agent disburse funds?
A. When requested by either party
B. Only after all conditions in the escrow instructions are satisfied
C. After deposit of earnest money
D. After the purchase agreement is signed
Rationale: Funds can only be released once all contractual conditions have
been met to ensure compliance and protect all parties involved.
6. Which of the following is considered an improper escrow practice?
A. Keeping detailed records of transactions
B. Using a licensed title company for closing
C. Commingling escrow funds with personal funds
D. Following written escrow instructions
Rationale: Commingling funds violates trust account regulations and can
lead to license revocation and legal penalties.
, 7. The Nevada Revised Statutes (NRS) governing escrow agents are
primarily found in which chapter?
A. Chapter 645
B. Chapter 645B
C. Chapter 116
D. Chapter 107
Rationale: Chapter 645B of the NRS outlines licensing, regulatory
requirements, and legal obligations for escrow agents in Nevada.
8. Which action could cause an escrow agent’s license to be suspended?
A. Paying utility bills from the escrow office account
B. Providing escrow services to out-of-state clients
C. Misappropriation of escrow funds
D. Hiring unlicensed administrative staff
Rationale: Misappropriation of client funds is a serious violation that can
result in immediate license suspension or revocation.
9. Who is responsible for reviewing title reports during an escrow
transaction?
A. The buyer’s attorney
B. The seller
C. The escrow agent
D. The real estate agent
Rationale: The escrow agent must review the title report to ensure the
property is free of liens or encumbrances before closing.
10. Which of the following best describes “commingling” in escrow
practices?
A. Mixing escrow funds with other clients’ funds
B. Mixing escrow funds with personal or business funds
C. Combining funds from multiple transactions in the same trust
account
D. Depositing funds late into a trust account
Practice Questions And Correct Answers
(Verified Answers) Plus Rationales 2026
Q&A | Instant Download Pdf
1. Which of the following best describes an escrow agent’s primary duty?
A. Representing the buyer in negotiations
B. Representing the seller in negotiations
C. Acting as a neutral third party to facilitate a transaction
D. Providing legal advice to parties
Rationale: The primary duty of an escrow agent is to act as an impartial
intermediary, ensuring that all contractual obligations are met before
funds or property are transferred.
2. Under Nevada law, escrow agents are required to deposit all funds
received into:
A. Their personal checking account
B. A trust account maintained for escrow purposes
C. A general business account
D. An investment account
Rationale: Escrow funds must be kept in a separate trust account to
prevent commingling with personal or business funds, ensuring proper
protection of clients’ money.
3. What document initiates the escrow process?
A. Deed of trust
B. Escrow instructions
, C. Purchase agreement
D. Title report
Rationale: Escrow instructions, agreed upon by all parties, formally
establish the duties of the escrow agent and outline the conditions for
closing the transaction.
4. Which of the following is required for an escrow agent to maintain
licensure in Nevada?
A. Annual federal tax filing
B. Surety bond or errors and omissions insurance
C. Maintaining a minimum of $50,000 in the business account
D. Continuing legal education
Rationale: Nevada law requires escrow agents to have a surety bond or
insurance to protect against negligence or misconduct in handling escrow
funds.
5. When may an escrow agent disburse funds?
A. When requested by either party
B. Only after all conditions in the escrow instructions are satisfied
C. After deposit of earnest money
D. After the purchase agreement is signed
Rationale: Funds can only be released once all contractual conditions have
been met to ensure compliance and protect all parties involved.
6. Which of the following is considered an improper escrow practice?
A. Keeping detailed records of transactions
B. Using a licensed title company for closing
C. Commingling escrow funds with personal funds
D. Following written escrow instructions
Rationale: Commingling funds violates trust account regulations and can
lead to license revocation and legal penalties.
, 7. The Nevada Revised Statutes (NRS) governing escrow agents are
primarily found in which chapter?
A. Chapter 645
B. Chapter 645B
C. Chapter 116
D. Chapter 107
Rationale: Chapter 645B of the NRS outlines licensing, regulatory
requirements, and legal obligations for escrow agents in Nevada.
8. Which action could cause an escrow agent’s license to be suspended?
A. Paying utility bills from the escrow office account
B. Providing escrow services to out-of-state clients
C. Misappropriation of escrow funds
D. Hiring unlicensed administrative staff
Rationale: Misappropriation of client funds is a serious violation that can
result in immediate license suspension or revocation.
9. Who is responsible for reviewing title reports during an escrow
transaction?
A. The buyer’s attorney
B. The seller
C. The escrow agent
D. The real estate agent
Rationale: The escrow agent must review the title report to ensure the
property is free of liens or encumbrances before closing.
10. Which of the following best describes “commingling” in escrow
practices?
A. Mixing escrow funds with other clients’ funds
B. Mixing escrow funds with personal or business funds
C. Combining funds from multiple transactions in the same trust
account
D. Depositing funds late into a trust account
