Bob, I'm in law school, this stuff's like crack to me:
Under a “race” statute, the first person to record their deed wins–irrespective of whether a subsequent purchaser knew of a “prior” purchaser, so long as the “prior” purchaser had not yet recorded his deed.
Under a notice statute, the question is more complicated: if the 2nd purchaser records before the 1st purchaser, 2nd purchaser wins UNLESS 2nd purchaser KNOWS that 1st purchaser already has a property right. In that circumstance, #2 has “notice” that there's a person “ahead” of her in the line to clear title. Note, if 1st purchaser records his deed before 2nd purchaser buys, that is sufficient to give “constructive notice” to any subsequent purchaser that the property is owned.
A race/notice statute gets even more fun. A subsequent purchaser wins so long as: (1) he has no notice (constructive or actual) that a prior purchaser has an interest in the property, AND (2) he records his deed before the prior purchaser. If either of those two elements aren't met, then the prior purchaser prevails (say that five times fast).
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