New Mexico Escrow & Title
Practice Questions & Answers (2026)
Escrow, title, and closing questions on the New Mexico exam test how real estate transactions are closed, how title is transferred, and what happens at settlement. New Mexico uses title companies or settlement agents to handle closings, and candidates must understand the closing process, settlement statement, and title insurance requirements under New Mexico 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 New Mexico practice.
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New Mexico Escrow & Title — Practice Questions & Answers
79 questions on Escrow & Title from the New Mexico real estate question bank. First 10 are free — sign up to unlock all 79.
Q1. In New Mexico, which document conveys legal title to real property from seller to buyer?
Explanation
A deed is the legal instrument used to transfer title to real property from the seller (grantor) to the buyer (grantee).
Q2. A general warranty deed provides the greatest protection to the buyer because the grantor:
Explanation
A general warranty deed offers the broadest buyer protection, with the grantor warranting title against all defects throughout the property's entire chain of title, not just during their ownership.
Q3. Title insurance protects the insured against:
Explanation
Title insurance protects the insured (lender or owner) against financial loss from undiscovered title defects, liens, or encumbrances that existed prior to the policy's effective date.
Q4. Proration at closing means:
Explanation
Proration at closing divides ongoing expenses like property taxes and HOA dues between buyer and seller based on their respective periods of ownership, typically calculated as of the closing date.
Q5. An abstract of title is:
Explanation
An abstract of title is a condensed chronological summary of all recorded instruments — deeds, mortgages, liens — that affect a property's title, used by an attorney to render a title opinion.
Q6. A lis pendens recorded against a property indicates:
Explanation
A lis pendens is a recorded notice that a lawsuit is pending that may affect title to the property, warning potential buyers and lenders of the litigation.
Q7. In New Mexico, the closing agent or escrow officer's primary role is to:
Explanation
The closing agent or escrow officer acts as a neutral third party, ensuring that all conditions of the purchase agreement are met and funds and documents are properly transferred at closing.
Q8. A mechanic's lien may be filed by:
Explanation
A mechanic's lien may be filed by contractors, subcontractors, or material suppliers who were not paid for work or materials provided to improve a property.
Q9. Which type of title insurance policy protects the lender?
Explanation
A lender's (mortgagee's) title insurance policy protects the lender's interest in the property up to the loan amount. The owner's policy separately protects the buyer.
Q10. Recording a deed in New Mexico protects the buyer primarily by:
Explanation
Recording a deed provides constructive notice to the public of the buyer's ownership interest, protecting the buyer against subsequent claims or transfers by the seller.
Q11. A chain of title refers to:
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