Alaska Escrow & Title
Practice Questions & Answers (2026)
Escrow, title, and closing questions on the Alaska exam test how real estate transactions are closed, how title is transferred, and what happens at settlement. Alaska uses title companies or settlement agents to handle closings, and candidates must understand the closing process, settlement statement, and title insurance requirements under Alaska law. Title insurance, title searches, and the difference between standard and extended coverage policies are tested, as are the specific closing costs that are customarily paid by buyers vs. sellers under Alaska practice.
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Alaska Escrow & Title — Practice Questions & Answers
140 questions on Escrow & Title from the Alaska real estate question bank. First 10 are free — sign up to unlock all 140.
Q1. A title insurance policy that protects the lender's interest is called a:
Explanation
A lender's (mortgagee's) title insurance policy protects the lender against losses from title defects up to the loan amount. It does not protect the buyer's equity. A separate owner's policy is needed to protect the buyer's full ownership interest.
Q2. A 'cloud on title' refers to:
Explanation
A cloud on title is any outstanding claim, lien, encumbrance, or other issue that may cast doubt on the owner's clear title. Examples include old unsatisfied mortgages, unresolved court judgments, or conflicting ownership claims.
Q3. In Alaska, the escrow process involves a neutral third party that:
Explanation
An escrow agent is a neutral third party who holds purchase funds, documents, and other items required for closing until all conditions of the transaction are fulfilled. Upon completion, the escrow agent disburses funds and transfers documents to the appropriate parties.
Q4. Which type of deed provides the greatest protection to the buyer?
Explanation
A general warranty deed provides the most protection, as the grantor warrants the title against all defects and claims arising from any point in the chain of title, not just during the grantor's ownership. A quitclaim deed provides no warranties at all.
Q5. A title search reveals a mechanic's lien filed by a contractor who was not paid for work on the property. At closing, this lien should be:
Explanation
A mechanic's lien is an encumbrance on the property that must be resolved before title can be conveyed free and clear. Typically, the lien is paid from the seller's proceeds at closing, and a release is recorded to clear the title.
Q6. Proration of property taxes at closing means:
Explanation
Property tax proration allocates the tax liability between the buyer and seller based on the number of days each party owns the property during the tax year. The method and direction of adjustment depend on whether taxes are paid in advance or arrears.
Q7. In an Alaska real estate transaction, the escrow holder's primary function is to:
Explanation
The escrow holder (escrow agent or closing agent) acts as a neutral third party who holds funds and documents and disburses them only when all conditions of the purchase agreement are satisfied. The escrow holder does not represent either party and cannot provide legal advice.
Q8. A title search in Alaska examines the public records to:
Explanation
A title search examines public records — deeds, mortgages, tax records, court judgments, and other documents — to trace the chain of title and identify any liens, encumbrances, easements, or other defects that could affect the buyer's ownership. It does not establish boundaries (that requires a survey).
Q9. Owner's title insurance protects:
Explanation
Owner's title insurance protects the buyer from financial loss due to title defects, liens, encumbrances, or other title problems that existed prior to the policy date but were not discovered in the title search. The policy protects the owner as long as they hold an interest in the property.
Q10. Lender's (mortgagee's) title insurance is typically required by:
Explanation
Lender's title insurance is typically required by the mortgage lender as a condition of the loan. It protects the lender's interest (the loan amount) against title defects. It does not protect the buyer/owner — a separate owner's policy must be purchased for that protection.
Q11. A 'cloud on title' is best described as:
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