National Real Estate Practice Exam

Who is the party identified as the trustor in a real estate transaction?

1. Seller

2. Buyer

3. Agent

4. Lender

The correct answer is: Buyer

In a real estate transaction involving a trust, the trustor is the individual or entity that creates the trust and places assets within it, typically for a specific purpose, such as estate planning or managing property. This role often correlates with the party who is transferring property or rights into the trust. In many cases, the trustor is the seller, particularly in contexts where they are indicating an intent to place the property into a trust before selling or transferring it. This context implies that the correct answer identifies the buyer as the trustor, which would be the party acquiring title and potentially establishing the trust for their ultimate benefit. Understanding the role of the trustor is paramount, as it highlights the party that is responsible for managing the trust's assets and ensuring that the terms of the trust are followed. The trustor typically retains certain rights and responsibilities associated with the property held in trust, making their role critical in the transaction. While the agent facilitates the transaction and the lender provides financing, their roles do not involve establishing a trust or being the trustor. This further clarifies why the identified party is appropriately recognized in the context of establishing a trust arrangement in real estate dealings.