Pennsylvania Escrow & Title
Practice Questions & Answers (2026)
Escrow, title, and closing questions on the Pennsylvania exam test how real estate transactions are closed, how title is transferred, and what happens at settlement. Pennsylvania uses title companies or settlement agents to handle closings, and candidates must understand the closing process, settlement statement, and title insurance requirements under Pennsylvania 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 Pennsylvania practice.
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Pennsylvania Escrow & Title — Practice Questions & Answers
106 questions on Escrow & Title from the Pennsylvania real estate question bank. First 10 are free — sign up to unlock all 106.
Q1. In Pennsylvania, which professional typically conducts the real estate closing and handles the disbursement of funds?
Explanation
In Pennsylvania, closings are typically handled by a title insurance company, settlement company, or attorney. These professionals conduct the settlement, ensure all documents are properly executed, and disburse funds according to the settlement statement.
Q2. A 'chain of title' refers to:
Explanation
The chain of title is the chronological sequence of ownership transfers — the history of all deeds, conveyances, and encumbrances recorded for a specific parcel of real estate. A clear chain of title is essential for marketable title.
Q3. Which type of title insurance covers title defects that existed before — but were not discovered at — the time of purchase?
Explanation
An owner's title insurance policy protects the buyer (and their heirs) against losses from title defects that existed before but were not discovered at closing — such as forged deeds, undisclosed heirs, or recording errors. Coverage is for the full purchase price.
Q4. In Pennsylvania, the deed is recorded in:
Explanation
In Pennsylvania, deeds and other real property documents are recorded in the office of the Recorder of Deeds in the county where the property is located. Recording provides constructive notice to the public of the transfer.
Q5. Pennsylvania is considered an 'attorney closing state,' which means:
Explanation
Pennsylvania is considered an attorney closing state, meaning it is customary and common for attorneys to conduct real estate closings. While not always legally mandated, attorneys play a central role in preparing documents and conducting the settlement.
Q6. In Pennsylvania, the transfer tax is:
Explanation
Pennsylvania's transfer tax totals 2% of the sales price by default — 1% to the state and 1% to the local municipality — split equally between buyer and seller (1% each). Local municipalities may impose higher rates. It is customarily split 50/50 between buyer and seller.
Q7. Title insurance in Pennsylvania protects against:
Explanation
Title insurance protects against losses arising from pre-existing defects in the title, such as undisclosed liens, forged deeds, fraud, errors in public records, or prior ownership claims. The lender's policy protects the lender; an owner's policy protects the buyer.
Q8. A lender's title insurance policy protects:
Explanation
A lender's (or mortgagee's) title insurance policy protects the lender's financial interest (the loan amount) in case title defects are discovered. It does not protect the buyer's equity. A separate owner's title insurance policy is needed to protect the buyer.
Q9. A chain of title refers to:
Explanation
The chain of title is the chronological record of all recorded instruments (deeds, mortgages, easements, liens) that establish the history of ownership and encumbrances for a specific parcel of real estate.
Q10. Marketable title means:
Explanation
Marketable title is title that is reasonably free from doubt, material encumbrances, or defects that would cause a reasonable buyer to refuse to purchase. It does not have to be perfect, but must be one that a prudent buyer would accept.
Q11. A mechanic's lien in Pennsylvania can be filed by:
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