Real Estate Law
House Deeds and Property Deeds
To transfer real property, buyers and sellers use legal documents called deeds to carry out a change in title. A house deed, also known as a property deed, is the primary legal instrument for transferring title (legal right) to real estate from one person to another. Depending on your state, a deed may need to be recorded before it is considered superior to other competing deeds.
For example, in a race-notice jurisdiction, a subsequent bona fide purchaser of real estate may only prevail over an earlier buyer if the subsequent purchaser had no notice of the earlier purchaser and the subsequent buyer’s deed was recorded first.
Property deeds can be used for many different kinds of real property, such as houses (single-family dwellings), condominiums, office buildings, mall strips, and even bare land. Like a vehicle has a certificate of title (known as a pink slip), land and other forms of real estate use deeds as the primary way to establish title or ownership.
In a real estate transaction, the final act that must occur at the close of escrow is the signing of the deed by the seller-grantor to the buyer-grantee to pass the property to its new owner. In most counties, a county recorder will keep chain of title records for every real property in the county so that the public record and public at large can determine ownership for all real estate.
A real property deed will typically have a grantor (seller) and grantee (buyer) which indicates who holds title to the property. While a deed is a tangible, physical paper that contains this information, title is the idea of ownership conveyed within the deed. Title information is included in the physical deed.
Other than the names of the grantor and grantee, a deed will also include other crucial information about the property, including its legal description, address, and county where it is located. Because real estate deeds concern valuable property, they are usually authenticated by a notary public to ensure that the grantor’s signature is accurate.
A property deed transfer occurs when one person transfers ownership (title) of a property to another person. A property transfer deed will list the names of the grantor (seller) and grantee (buyer) and a description of the property boundaries. It will also contain the grantor’s signature alongside words that convey ownership of the property to the grantee; this is also known as a conveyance clause.
Finally, the deed will indicate that the seller has received something of value (consideration) in exchange for the property. In most cases, this will be the fair market dollar value of the property unless it was gifted.
Most sales of real property will be effectuated through grant deeds, free and clear of any liens and other encumbrances. A grant deed is the most common form of deed, conferring clear title and ownership rights to the property from one party to another.
Because there are different interests that an individual can possess in a property, there are other various forms of deeds that can be used in connection with property. Here are a few other common deed forms:
- Quitclaim Deed. A quitclaim deed is usually used between family members or spouses wherein one spouse formally renounces all legal claims that they may have in connection with a property. Because a quitclaim only involves a party’s “quitting” of all “claims” they have against a property, it does not offer any warranty as to ownership or title, and is therefore the weakest mechanism for transferring property.
- Deed of Trust – A deed of trust creates a security interest in real property to allow a lender to extend a mortgage to a borrower and to use the underlying property to secure that debt. In some jurisdictions, a mortgage deed may be used instead.
- Warranty Deed – With a warranty deed, the grantor (selling property owner) guarantees that their title to the property is clear and absolute. This type of deed provides the highest amount of protection to a buyer (grantee) in transferring ownership of a property.
Other forms of deeds may be used in different jurisdictions to convey ownership interest in various ways or as part of the home buying process. In general and irrespective of the type of deed used, the information contained in the deed must always include the property in question and the people whose title to the property will be affected accordingly.
If you need help preparing a deed or verifying that one has been prepared correctly, you should consult with an experienced real estate attorney.