California Real Estate Practice Exam

The trust deed (and note) that normally takes priority is the one that is:

1. a construction loan.

2. executed/delivered first.

3. for the greatest amount.

4. recorded first.

The correct answer is: recorded first.

The correct answer is (D) recorded first. A trust deed is a legal document that is used to secure a loan on a property. The priority of a trust deed is determined by the order in which it is recorded. This means that the first trust deed to be recorded will have priority over any subsequent trust deeds. This is because the recording date establishes the order in which the liens are placed on the property. In comparison, options (A) and (B) are not necessarily the determining factors for priority. A construction loan may have its own set of priority rules, and the execution or delivery date does not necessarily take precedence over the recording date. Option (C), while it may seem intuitive that more money equals more priority, the recording date still supersedes the amount borrowed. Therefore, the trust deed that is recorded first will always have priority.