During what phase is a deed of trust most commonly utilized?

A deed of trust is most commonly utilized during the property sale closing phase. This legal document serves as a secured loan agreement between the borrower, lender, and a third-party trustee. It lays out the terms of the loan and conveys the property title to the trustee until the borrower pays off the loan in full.

At the closing, the deed of trust is executed to finalize the financial arrangement, allowing the lender to hold a legal claim to the property as security for the loan. This process ensures that all parties are aware of their rights and responsibilities, and it functions as a vital tool in real estate transactions by protecting the lender's interests while providing the borrower with the funds necessary to complete the purchase.

In contrast, a property appraisal provides a market value estimate of the property, while loan approval involves underwriting and confirming that the borrower qualifies for financing. The initial property listing relates to marketing the property for sale, which occurs prior to any financial agreements like a deed of trust being established.