Maryland Escrow & Title
Practice Questions & Answers (2026)
Escrow, title, and closing questions on the Maryland exam test how real estate transactions are closed, how title is transferred, and what happens at settlement. Maryland uses title companies or settlement agents to handle closings, and candidates must understand the closing process, settlement statement, and title insurance requirements under Maryland 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 Maryland practice.
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Maryland Escrow & Title — Practice Questions & Answers
99 questions on Escrow & Title from the Maryland real estate question bank. First 10 are free — sign up to unlock all 99.
Q1. In Maryland, where are deeds and other real property documents recorded?
Explanation
In Maryland, deeds and other real property instruments are recorded at the land records office of the circuit court in the county where the property is located.
Q2. Maryland imposes a recordation tax when a deed is recorded. Who typically pays this tax?
Explanation
Maryland's recordation tax is typically paid by the buyer, though it can be shared between or negotiated by buyer and seller in the purchase agreement.
Q3. A special warranty deed in Maryland provides which level of title guarantee?
Explanation
A special warranty deed provides a limited warranty: the grantor guarantees title only against defects arising during the grantor's period of ownership, not against prior defects.
Q4. Actual (actual notice) in real estate means:
Explanation
Actual notice means a party has direct, personal knowledge of a fact — they were actually told or personally discovered the information, as opposed to constructive notice (public records).
Q5. Maryland is considered an 'attorney state' for real estate closings, meaning:
Explanation
Maryland is an attorney closing state; a licensed attorney must conduct or supervise the settlement/closing process.
Q6. What does title insurance protect against?
Explanation
Title insurance protects the insured against losses arising from title defects, liens, or encumbrances that existed before the policy's effective date.
Q7. An owner's title insurance policy in Maryland protects:
Explanation
An owner's title insurance policy protects the buyer/owner's equity. A separate lender's policy (mortgagee policy) protects the lender.
Q8. In Maryland, transfer taxes on a real estate sale are paid by:
Explanation
In Maryland, state transfer tax is typically split equally (50/50) between buyer and seller, though this may be negotiated.
Q9. Maryland's state transfer tax rate on the sale of real property is:
Explanation
Maryland's state transfer tax rate is 0.5% of the consideration, but for first-time Maryland homebuyers purchasing a principal residence, the rate is reduced. Wait — the standard Maryland state transfer tax is 0.5%. The answer is B (0.5%).
Q10. Recordation tax in Maryland is charged:
Explanation
Maryland's recordation tax applies to all recorded instruments that convey an interest in real property, including deeds and deeds of trust.
Q11. What is the purpose of a HUD-1 Settlement Statement (now replaced by the Closing Disclosure)?
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