California Real Estate Practice Exam

A broker arranges the sale of a home with a purchase money trust deed (T.D.) from the lender. The broker is NOT required to see that the T.D. is recorded if the:

1. broker is not involved financially in the loan procurement

2. buyer and seller select not to have an escrow

3. buyer instructs him not to record

4. beneficiary instructs him not to record the T.D.

The correct answer is: broker is not involved financially in the loan procurement

The correct response highlights the broker's role in a real estate transaction and the obligations that accompany it. When a broker arranges the sale of a property using a purchase money trust deed, their responsibilities regarding the recording of that deed depend on their involvement in the financial aspects of the loan procurement. If the broker is not financially involved in the loan, they do not have a legal obligation to ensure that the trust deed is recorded. In real estate practices, the recording of a trust deed is essential for protecting the lender’s interests by providing public notice of their security interest in the property. However, if the broker's role is limited to arranging the transaction without any financial stake, then the responsibility for recording falls on the parties directly involved in the transaction, such as the lender or the buyer. Other scenarios listed may suggest possible conditions under which recording might not occur, but they do not align with the fundamental responsibilities of a broker. For instance, if a buyer instructs the broker not to record, it does not negate the broker’s duties if they have a financial connection. Similarly, the choice of whether or not to use escrow does not directly relieve a broker of their responsibilities pertaining to recording if they are financially involved. The beneficiary instructing the broker not to