Montana Escrow & Title
Practice Questions & Answers (2026)
Escrow, title, and closing questions on the Montana exam test how real estate transactions are closed, how title is transferred, and what happens at settlement. Montana uses title companies or settlement agents to handle closings, and candidates must understand the closing process, settlement statement, and title insurance requirements under Montana 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 Montana practice.
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Montana Escrow & Title — Practice Questions & Answers
119 questions on Escrow & Title from the Montana real estate question bank. First 10 are free — sign up to unlock all 119.
Q1. A general warranty deed provides the greatest protection to the buyer because it:
Explanation
A general warranty deed contains the broadest covenants of title, with the grantor warranting and defending the title against all lawful claims from any source, including those that arose before the grantor owned the property.
Q2. Title insurance protects the policyholder against:
Explanation
Title insurance protects against losses from title defects, liens, encumbrances, or other claims against the property that existed before the policy was issued but were not discovered at closing.
Q3. In a Montana real estate closing, the escrow agent's primary responsibility is to:
Explanation
An escrow agent is a neutral third party who holds funds and documents and disburses them according to the written escrow instructions agreed upon by buyer and seller.
Q4. A 'cloud on title' refers to:
Explanation
A cloud on title is any claim, lien, or encumbrance that may affect the validity or marketability of a property's title, such as an unresolved judgment lien or improperly executed deed.
Q5. A special warranty deed differs from a general warranty deed because a special warranty deed:
Explanation
A special warranty deed contains a limited warranty; the grantor only warrants title against claims or defects that arose during their period of ownership, not against prior title defects.
Q6. Constructive notice is provided by:
Explanation
Constructive notice is the legal presumption that everyone is aware of information in the public record. Recording a deed, mortgage, or lien in county records provides constructive notice to the world.
Q7. Actual notice means:
Explanation
Actual notice is direct, personal knowledge of a fact — you actually know about it. This is distinct from constructive notice (record notice) or inquiry notice (information that would lead a reasonable person to investigate).
Q8. Which of the following liens has the highest priority in Montana?
Explanation
Property tax liens generally have the highest priority over all other liens in Montana, including mortgages and judgment liens, regardless of when they were recorded.
Q9. A mechanic's lien in Montana is filed by:
Explanation
A mechanic's lien (also called a construction lien) may be filed by contractors, subcontractors, or material suppliers who have performed work or supplied materials to a property and have not been paid.
Q10. The purpose of a title search is to:
Explanation
A title search examines public records — deeds, mortgages, liens, judgments, easements — to establish the chain of title and identify any issues that could affect ownership.
Q11. In Montana, real estate closing typically involves:
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