Anyone purchasing a house for the first time must become acquainted with some real estate jargon. You’ll need to grasp the distinction between being pre-qualified and pre-approved for a mortgage, for example. You must also grasp how house deeds work. Continue reading to learn what a house or property deed is, why you’ll need one to close on a house, and how to transfer it.
What Is A House Deed Or Property Deed?
A house deed, sometimes known as a property deed, is a legal document that transfers real estate ownership from the grantor (seller) to the grantee (buyer). Property deeds are the legal documents that define ownership. When a house or property is sold, the buyer and seller sign a deed to transfer ownership.
To be legally legitimate, a property deed must accompany every property acquisition and be completed, notarized, and lodged on public record. Property deeds include a full description of the property, including the property borders, to specify whose property the deed is for and who owns it.
A property or house deed is a vital legal document, and a real estate attorney can be useful during the home purchase and closing process to ensure that all documentation is in order.
Types of House Deed
Most deeds are either governmental or private in nature. Official acts are carried out in a court or any other type of legal action. The majority of home transactions are private and take place between individuals and businesses.
Here’s a rundown of some of the most common types of acts you’ll come across:
#1. General Warranty Deeds
A general warranty deed protects the grantee the most because it assures that they have a clear right to the property. The grantor guarantees that there are no liens or easements against the property, and that if there are, the grantee will be reimbursed.
A general warranty deed differs from other deeds in that it guarantees that no prior claims to the property exist. Quitclaim deeds and special warranty deeds, on the other hand, give no such guarantees.
#2. Special Warranty Deeds
A special warranty deed provides some protection for the grantee, but not as much as a standard warranty deed. This is because a special warranty deed only assures that the title is free of defects during the grantor’s ownership tenure.
However, the grantor makes no promises about the condition of the title prior to their ownership of the property. When a home has been foreclosed on and the bank is selling the property to a new owner, this sort of deed is commonly employed.
#3. Quitclaim Deeds
A warranty deed is another name for a quitclaim deed. It provides the grantee with the least level of protection, makes no warranties about the title, and provides no legal redress if there is a problem.
#4. Special Purpose Deeds
Special-purpose deeds are deeds that are typically utilized in court or by someone acting in an official capacity. In general, they provide no meaningful protection to the grantee and are only utilized in limited circumstances. Here are a few examples of common special-purpose deeds:
- Tax deed: A tax deed transfers ownership of the property to the government when taxes on the property are not paid. The property is then auctioned off by the government to cover the outstanding taxes.
- Deed in lieu of foreclosure: To avoid foreclosure proceedings on an unpaid mortgage, the borrower conveys the property to the lender, usually a bank, using a deed in lieu of foreclosure.
- Gift Deed: A deed of gift is used to transfer ownership from one person or entity to another without remuneration.
- Sheriff’s deed: A sheriff’s deed, like a tax deed, grants ownership to a buyer during a sheriff’s sale. The proceeds from the sale of the deed are used to satisfy a court judgment against the property owner.
- Executor’s deed: This deed is used when someone dies with a will. This deed is used by the estate executor to transfer title or property to the grantee named in the will.
- Administrator’s deed: When a deed dies without a will, a court appoints an administrator, who utilizes this deed to transfer title or property to a grantee.
Read Also: CAP RATE: Definition and Uses In Real Estate Investing
What Does A House Deed Look Like?
A property deed does not require a specific template. It must be a physical, written document. Specific criteria vary by state, although many property deeds contain information that is similar. Here are some examples of common information types:
- Names and addresses: The grantor (seller) and grantee (buyer) provide their contact information.
- Property Description: This is the legal description of the actual property borders, mentioning common points such as roadways and sewer lines.
- Grantee signature: The grantee must sign with their complete name, leaving no ambiguity as to who they are. The signature must match the grantee’s name as it appears on other papers.
- Conveyance words or granting clause: This clause gives the grantee ownership. It outlines the grantee’s rights as well as any other parties who may be claiming them.
- Consideration clause: A clause in the deed states that the grantor received something in exchange for the property. This is typically money, and the amount must be specified. There are methods to conceal the amount paid that is permissible or usual in various locations. If the property was given as a present, a phrase such as “for love and affection” is utilized.
Other typical information varies according to the type of property. If the house is in a planned development, the property deed will include the plot’s name and information. There may also be a list of conditions or reservations associated with the property transfer.
What Is the Difference Between a House Deed and a Title?
Because deeds and titles are similar concepts, they are frequently confused. The legal right to visit a property and transfer ownership to another party is referred to as the title. You can own a property in its entirety or in part. However, you can never transfer someone more than you actually own.
A house deed, on the other hand, serves as a confirmation of property ownership. Property deeds must be submitted and notarized in most states. In some situations, an impartial witness who can attest that a deed has been signed must also be present.
How to Get the Deed to Your House
If you’re in the process of buying a house, you should receive the deed to your new home when the title is transferred to you. This document is yours to keep, but if you need another copy of your house deed after you’ve legally purchased it, you can get one from your county recorder’s office at any time.
Making Changes to Your Deed
You may need to make adjustments to your deed at some point. For example, if you purchased a property with another person and that person dies, you may want to modify the deed.
If you refinance your home, you may need to modify your deed as well. The lender will record a new deed of trust against the property during a refinance.
Deeds may also need to be amended owing to clerical errors or a change in ownership. In either case, there is a certain procedure that must be followed to modify your deed.
Because deeds are public documents, you may need to present your proposed revisions in court. If these adjustments are accepted, you must record them with the Recorder of Deeds in your county.
Read Also: DEED IN LIEU OF FORECLOSURE: All You Need To Know
How to Transfer a House Deed
It’s not uncommon to want to transfer your house deed to a family member, usually so that when you die, your house will go to the relative of your choice. Although changing the deed is a reasonably short and simple process, you should be aware that when you transfer your deed, you lose all control and an ownership interest in your house.
#1. Making Use of a Quitclaim Deed
1. Obtain the form deed from the county registrar or register of deeds where your house is located:
With a quitclaim deed, you essentially quit your claim to the property (thus the name) and transfer it to someone else.
- When no money changes hands, quitclaim deeds are the most typical means of transferring property among family members or gifting property to someone.
- Because a quitclaim deed merely conveys whatever claim of ownership you have, there is no chance of being sued by a family member or a future buyer if it turns out there is something incorrect with the deed and you didn’t have complete ownership of the house. It does not guarantee that you have a specific claim.
2. Complete the form.
A quitclaim deed has fields for your name and the name of the family member to whom you are transferring ownership of your home.
- You must also add your home’s legal description. If you have access to your original deed, you can utilize it, or you can use official plats or the street address. Because it is a quitclaim deed, the description does not have to be as detailed as it would otherwise be. It only needs to be related to your initial deed.
- The form will also include blanks for signatures, but you should not sign it unless you are in the presence of a notary.
3. Sign the deed in front of a notary.
In some states, the family member to whom the house deed is being transferred must also sign. Some states might require other witnesses in addition to the notary.
4. Hand deliver or certified mail the deed.
Once you sign the house deed transfer, it must be delivered to the new property.
- If the family member to whom you transferred your house was not present when you signed the deed, you might deliver it to them or send it to them.
- Using certified mail or another equivalent service ensures that you will know when they have received it.
5. Record the deed with your relative.
It is the responsibility of the individual to whom you transferred your house to record the deed at the county recorder’s office once you have made the transfer. Otherwise, it will not become part of the legal record of the property and may pose complications in the future.
#2. Making Use of a TOD Deed
1. Determine whether a transfer-on-death deed is available in your area.
The TOD deed allows you to keep full ownership of your property while you’re alive, yet transfer it to your preferred family when you die without having to go through probate.
- As of 2015, TOD deeds were available in 22 states and the District of Columbia, including Colorado, Illinois, Ohio, and Virginia. Check with your county recorder’s office to see if this is an option for you. If you want to avoid probate by transferring your house to a family member, a TOD deed may be a better option for you because it allows you to keep control of your house while you’re still alive.
2. Make the deed.
A TOD deed appears like any ordinary deed, but it includes a provision stating that it will not take effect until the owner dies. Each state has different criteria, so if you’re not sure about your ability to go through those regulations on your own, you should consult a real estate attorney.
3. Sign in front of a notary public.
Check your state’s laws to be sure you don’t require any additional witnesses. It is not necessary for the family member to whom you are passing your property to be present.
4. Report a deed of it.
You must record it personally at your county recorder’s office after signing it. Otherwise, no one will be aware of its existence, and it may never be implemented.
- You may change your mind at any time and perform another deed. Until you die, you maintain full title and ownership of your property.
- A TOD deed automatically transfers any mortgages or other liens on your property. You are simply bequeathing your ownership interest in the property, as with a quitclaim deed.
- When you die, your selected family member may need to provide an affidavit and death certificate to assume control of the property, but this is still a faster and smoother process than probate.
#3. Making Use of a Warranty Deed
1. Speak with a real estate lawyer.
Because warranty deeds are the most complicated form of transferring title to your property, you will almost certainly need the assistance of an attorney.
- Warranty documents, also known as grant deeds, guarantee to the new property owner that you have good title to the property and that no one else has a stake or claim to it.
- Warranty deeds are rarely utilized to transfer a house to a family member when no money is exchanged since they are so cumbersome.
- A warranty deed, while complicated for you, provides the relative to whom you are transferring your property more trust since you swear that you own the property free and clear of any mortgages or other encumbrances and that no one else has a competing claim to the property.
2. Perform a title search on your property.
Before signing a warranty deed, conduct a title search to ensure that the assertions in the deed are correct and that the title to the property is clear. This procedure can be costly and time-consuming.
- Although you can conduct a title search yourself because property data are public, a professional title searcher will do a more thorough job in less time than you would.
- Title insurance protects you against any faults in your title, whether disclosed or hidden, that could cause problems with your deed or even invalidate your transfer. Title insurance is costly, and the expense is usually divided between the original owner and the future owner.
3. Finish the deed.
Your deed, like other forms of deeds, will include information about you and the family member to whom you’re transferring title, as well as a thorough and detailed legal description of the property.
4. Sign the deed
Sign the deed in the presence of a notary public and any additional witnesses needed by law in your state.
5. Transfer the house deed
Give the deed to the relative who will inherit the property.
6. Make certain that the deed is recorded.
Although this is technically your family member’s job, if you’ve engaged an attorney to draft the deed, she may agree to record it herself.
- The deed remains legitimate even if it is not documented, but failure to record it can cause severe complications later on because no one else is aware of your relative’s claim to your property.
- Not documenting the deed would nullify all of your gains from transferring the deed, including your attempt to avoid probate.
#5. Forming a Joint Tenancy
1. Prepare a new deed in which you and your relative are listed as joint tenants with the right of survivorship.
You must both acquire equal shares at the same time to have a joint tenancy.
- Preparing a new deed effectively sells your property to you and your relative.
- Joint tenancy with right of survivorship means that if one of you dies, the other automatically inherits all interest in the property.
- Keep in mind that because you’re giving someone a property in your property, you’ll have to pay gift taxes if that stake is worth more than $10,000.
2. Finish the deed.
Because you are only replacing the names on the deed, you may simply duplicate everything else from your previous deed.
3. Sign the deed.
Depending on the laws in your state, you may be required to sign the deed in front of a notary public or other witnesses.
- Because you and your relative are both acquiring ownership of the property in this case, you must both sign the deed.
4. Make a record of the deed.
If you want to avoid probate, the deed must be published; otherwise, the joint tenancy will not be public record.
Conclusion
Property deeds differ depending on the type of property being transferred. When looking for real estate, the type of deed being provided can tell you a lot about the property. Buyers are best protected by general warranty deeds. Quitclaim deeds, on the other hand, provide the least protection for buyers and carry no obligation for sellers. To buy or sell a house, you must have a property deed.
Before you sign a deed, you should understand the protection it provides you as the buyer. It’s critical to understand your obligations as the grantor.
House Deed FAQs
What is the main purpose of a house deed?
A house deed’s purpose is to transfer title, or legal ownership of a property or asset, from one person or corporation to another.
What happens to house deeds when mortgage paid off?
When the mortgage is paid off, you have the right to have your ownership documents, also known as property deeds, returned to you. Your Mortgagee has no legal right to keep them and will nearly always return them to you after receiving your final payment.
What happens if you lose the deeds to your house?
If the Title Deeds are misplaced or damaged and the property or land is registered, a simple check with Land Registry will disclose ownership facts. Often, the Land Registry will have electronic versions of documents related to the property that can be downloaded for a modest price through their website.
