Any time you purchase a new piece of property you’ll receive a deed to that property. However, most people have no idea what a deed is or what it does. Title determines who owns the property and how they own the property; whereas, deeds are legal documents that transfer the property from the owners to the individuals purchasing the property. Keep reading to learn the most common types of deeds, what information is needed to complete one, and why recording is important.
Types of Deeds
Deeds come in several different types, including: general warranty; quitclaim; and joint tenants with rights of survivorship.
General Warranty Deed
The general Warrant deed is the most common because it offers the highest protection for the individual purchasing the property. This type of deed is used when the owner of the property warrants to the person receiving the property that the property has clear title and there are no encumbrances against it. This is the most common deed of them all because this is the deed used the majority of time in real estate transactions. This is because in most transactions a title examination is required prior to closing.
Once title has been reviewed and cleared, the owner, also known as the grantor or seller, can then issue a general warranty deed to the buyer, also known as the grantee, to warrant that the title has been cleared. This is the best option for buyers in real estate sales.
Quitclaim Deed
The quitclaim deed transfers the owner’s entire interest in the property to the person receiving the property. When property is transferred without a traditional sale, this is the deed your attorney’s office will likely complete for you. This is because when a title examination is not done on said property the owner is unable to warrant or promise clear title to the person receiving the property.
Quitclaim deeds are not used for real estate transactions except to clear title, such as an issue with someone else possibly having an ownership right in the property. In this case he/she will then be asked to sign a quitclaim deed to make sure the new owner has complete title. A quitclaim deed is also a fast and easy way to move property among family members.
Joint Tenants with Rights of Survivorship
The joint tenants with rights of survivorship can be a general warranty deed or a quitclaim deed. This phrase is used on a deed when there is ownership by two or more individuals who have both (1) equal rights to the property while they’re alive and (2) survivorship rights at the time of the other’s death. Rights of survivorship means that when one owner dies the entire ownership interest transfers to the surviving owner.
The survivorship right allows the surviving owner to gain title of the property without the need of going through probate. This is common with general warranty deeds, especially when you have married individuals purchasing property. Typically, spouses want to leave the entire ownership to the other spouse. It’s also very common to see joint tenants with rights of survivorship deeds with parents and children.
What information is needed?
When you consult an attorney to draft a deed for you, you should provide the following information: the legal description of the property being conveyed; the address of the property; the names of the grantors and grantees.
Legal Description and Physical Address
The deed must sufficiently identify what real estate is being conveyed. The most important thing needed to complete a deed is the legal description of the property. If you’re the owner of the property, you likely have a copy of the deed from when you bought it. This deed will likely have the legal description on it. Usually, the legal description can be found after a phrase like, “a parcel of land being more particularly described as follows.”
If you are acquiring the property and do not have a copy of the legal description, the owner or real estate agent should have a copy.
If the property being conveyed has a physical address, it’ll need to be listed on the deed. A correct description of the property, along with a physical address, helps to properly identify the property being conveyed.
Grantor and Grantee
It is important to understand the difference between a Grantor and Grantee. A Grantor is the individual who is transferring ownership of the property to another person. In general, the Grantor in a real estate transaction is the current holder of the property. The Grantor is typically known as the seller. The Grantee is the individual who receives the transfer of the property from the Grantor. Therefore, the Grantee is also known as the buyer.
In order to complete a deed you must have the Grantor and Grantee information. The attorney needs correct information as to who will be conveying the property and who will be receiving the property. Some states require information on whether the Grantor is married or single. This is because (1) if the Grantor is married and (2) if the property is homesteading property of the Grantor and their spouse, the Grantor’s spouse will be required to sign the deed as well even if they’re not listed on title.
It’s important to ensure the Grantor’s name is listed on the deed the same way it’s listed on title. This prevents any confusion that may occur later down the road. You should provide the correct way that the Grantee chooses their legal name to be listed on title. Some individuals prefer to spell out their full names rather than maybe just a first or last name. Also, make sure the Grantee’s mailing address is spelt correctly on the deed because this provides your local revenue office with the correct mailing address to mail the property tax bill.
Deeds do not require much information, the document itself is frequently short. However, it is always very important to file it with the appropriate authority.
Why is it important to record?
Once an individual has signed the deed and their signature has been notarized, the property is considered transferred from the Grantor to the Grantee. However, for the Grantee to be protected from any future claims on the title, it is important to have the deed recorded. It also allows taxing authorities and lenders to know who owns which property.
Failing to record a deed means the prior owner remains the owner on record. This is a problem because the prior owner could try to sell the property again or take out additional loans. Though an unrecorded deed is valid, taking time to record the deed prevents any mishaps from occurring. To record a property deed is very simple! Just go to your local court house and they’ll provide you with all the information.
Conclusion
While title determines who owns the property and how they own the property, deeds are legal documents that transfer the property from the owners to the buyers. There are numerous types of deed and each one operates a little differently. The above is not legal advice. Should you need advice on a deed or would like to use Chris Baldwin Law for your next closing, schedule your FREE Consultation by clicking HERE or contact us by calling 334-863-4555.
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