A deed of trust is a legal document that transfers ownership of real property (real estate) to a trustee until the person or entity buying the real property repays a loan for the purchase of the real property. A deed of trust is similar to a mortgage—some states use a mortgage and other states use a deed of trust.

In a deed of trust transaction a lender (the bank) gives a borrower (who is purchasing the real property) money to pay the seller, and the borrower gives the lender one or more promissory notes for repayment of the loan. As security for the promissory notes, the borrower transfers the ownership interest (title) in the real property to a trustee—often a title company—to hold until the borrower repays the lender.

If the borrower fails to timely make payments and defaults on the loan, the property generally may be sold without the lender using or going through the court system. This is known as nonjudicial foreclosure and is usually less time-consuming and less expensive for the lender.

A deed of trust is also known as a trust deed, a trust indenture, an indemnity mortgage, or a common-law mortgage.

In Florida, the primary instrument used to secure a loan for the purchase of real estate is a mortgage, not a deed of trust. Florida is a 'lien theory' state, which means that the borrower retains the title to the property while the mortgage serves as a lien against the property for the loan. When a borrower takes out a mortgage, they sign a promissory note and a mortgage document. The promissory note is the borrower's promise to repay the loan, and the mortgage document creates the lien on the property. If the borrower defaults on the loan, Florida requires judicial foreclosure, which involves the court system. The lender must file a lawsuit to obtain a court order to foreclose on the property. This process is more time-consuming and can be more expensive than nonjudicial foreclosure, which is not available in Florida because the state does not use deeds of trust for real estate transactions.