Nevada Real Estate Complete Practice Exam 2025

A power of sale clause is commonly included in a trust deed. This clause grants the lender the authority to initiate a non-judicial foreclosure process in the event of default by the borrower. The structure of trust deeds typically allows for this type of arrangement, wherein the property is conveyed to a third-party trustee who holds the title until the borrower pays off the loan. In case of default, the power of sale clause enables the trustee to sell the property without needing to go through court, thus streamlining the foreclosure process.

In contrast, while a mortgage may also contain similar provisions, it traditionally involves a judicial foreclosure process, making it less common to see a power of sale clause within that document. A promissory note is primarily a financial agreement outlining the borrower's promise to repay a loan, so it wouldn't include details regarding property foreclosure. A listing contract pertains to the agreement between a seller and a real estate agent to sell a property, and it does not typically deal with foreclosure mechanisms or power of sale clauses. Therefore, the trust deed is the document where a power of sale clause would be most likely found.