National Real Estate Practice Exam

In a real estate transaction, who typically acts as the trustee?

1. Seller

2. Borrower

3. Third Party

4. Real Estate Agent

The correct answer is: Third Party

In a real estate transaction, the trustee typically refers to a third party who is responsible for holding the title to a property in a trust until certain conditions are met, often related to a loan or mortgage. This arrangement is commonly seen in situations where the property is financed through a deed of trust. The trustee plays a crucial role in ensuring that the terms of the trust are adhered to, which can include collecting payments and, if necessary, initiating foreclosure proceedings if the borrower defaults on the loan. By acting as an impartial party, the trustee ensures fairness and protection for both the lender and the borrower. The other roles mentioned, such as the seller, borrower, and real estate agent, are typically involved in various aspects of the transaction but do not hold or manage the title in the context necessary to fulfill the trustee's duties. Each of these parties has specific responsibilities that facilitate the sale or transfer of property, but their functions do not align with the fiduciary role that a trustee fulfills.