South Dakota Escrow & Title
Practice Questions & Answers (2026)
Escrow, title, and closing questions on the South Dakota exam test how real estate transactions are closed, how title is transferred, and what happens at settlement. South Dakota uses title companies or settlement agents to handle closings, and candidates must understand the closing process, settlement statement, and title insurance requirements under South Dakota 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 South Dakota practice.
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South Dakota Escrow & Title — Practice Questions & Answers
137 questions on Escrow & Title from the South Dakota real estate question bank. First 10 are free — sign up to unlock all 137.
Q1. A title search is conducted primarily to:
Explanation
A title search reviews public records to identify any outstanding liens, encumbrances, easements, covenants, or other defects in the chain of title that could affect the buyer's ownership rights.
Q2. An owner's title insurance policy protects:
Explanation
An owner's title insurance policy protects the buyer (and their heirs) against financial loss from title defects, liens, or encumbrances that existed before the closing but were not discovered in the title search.
Q3. In a real estate closing, proration is used to:
Explanation
Proration divides ongoing costs (such as property taxes, HOA dues, and prepaid rents) between the buyer and seller based on the closing date so each party pays only for the period they own the property.
Q4. General warranty deed provides the greatest protection to the buyer because the grantor:
Explanation
A general warranty deed provides the most complete protection. The grantor covenants to defend the title against all claims, whether they arose before or during the grantor's ownership — covering the entire history of the property.
Q5. In South Dakota, a title search examines public records to:
Explanation
A title search reviews public records (deeds, mortgages, judgments, tax liens) to establish the chain of title and identify any claims or encumbrances that could affect ownership.
Q6. Title insurance in South Dakota protects the policyholder from:
Explanation
Title insurance protects against losses from title defects, liens, or claims that existed before the policy was issued but were not discovered during the title search.
Q7. In South Dakota, an owner's title insurance policy protects:
Explanation
An owner's title insurance policy protects the buyer/owner's equity investment in the property for as long as they or their heirs hold an interest.
Q8. Which of the following would be found in the public record and shown on a title search in South Dakota?
Explanation
Recorded easements and deed restrictions appear in the public record and are revealed by a title search. Unrecorded matters (verbal agreements, unrecorded easements) may not appear.
Q9. At a South Dakota closing, the HUD-1 or Closing Disclosure is used to:
Explanation
The Closing Disclosure (or HUD-1 for older transactions) itemizes all financial transactions at closing, including purchase price, loan amounts, fees, prorations, and net proceeds for each party.
Q10. In South Dakota, prorations at closing are typically calculated based on:
Explanation
Real estate prorations in South Dakota (and most states) are typically calculated using a 360-day banker's year (30-day months), which simplifies daily rate calculations.
Q11. A South Dakota property's annual taxes of $2,400 have not been paid. Closing is on April 1. What is the seller's tax proration (amount owed at closing)?
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