Which of the following is classified as a security instrument in a real estate transaction?

Which of the following is classified as a security instrument in a real estate transaction?

• A. Note
• B. Trust deed
• C. Easement
• D. Estoppel

Answer: (B)

In real estate transactions, a trust deed serves as a security instrument. It is used to secure the repayment of a loan through the property itself. When a borrower takes out a mortgage or a loan to buy property, the trust deed acts as a legal instrument that provides the lender with a claim against the property if the borrower defaults on the loan. This means that the lender can initiate a foreclosure process to recover the money owed, using the property as collateral. Understanding the function of a trust deed is crucial in real estate finance. It conveys an interest in the property to the lender, who holds that interest until the debt is fully repaid. This is a fundamental concept in real estate transactions, highlighting the relationship between borrowers and lenders. The other options do not fit the definition of a security instrument in this context. A note is simply a promise to pay and does not secure the loan with the property itself. An easement grants a right to use another's property for a specific purpose but does not involve a loan or security. An estoppel is a legal principle that prevents someone from arguing something contrary to a previous claim or behavior but also does not relate to securing a loan. Thus, the trust deed’s role as a mechanism for securing debt makes it

In real estate transactions, a trust deed serves as a security instrument. It is used to secure the repayment of a loan through the property itself. When a borrower takes out a mortgage or a loan to buy property, the trust deed acts as a legal instrument that provides the lender with a claim against the property if the borrower defaults on the loan. This means that the lender can initiate a foreclosure process to recover the money owed, using the property as collateral.

Understanding the function of a trust deed is crucial in real estate finance. It conveys an interest in the property to the lender, who holds that interest until the debt is fully repaid. This is a fundamental concept in real estate transactions, highlighting the relationship between borrowers and lenders.

The other options do not fit the definition of a security instrument in this context. A note is simply a promise to pay and does not secure the loan with the property itself. An easement grants a right to use another's property for a specific purpose but does not involve a loan or security. An estoppel is a legal principle that prevents someone from arguing something contrary to a previous claim or behavior but also does not relate to securing a loan. Thus, the trust deed’s role as a mechanism for securing debt makes it