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Deeds are legal documents that transfer ownership of real estate property from the seller to the buyer. Deeds contain all of the names of past and present owners as well as a description of the property. Deeds are registered with the County Recorder (usually found at the courthouse) of the city where the property is located, and are signed by the seller and buyer in front of a notary. The notary will also sign and stamp the deed thereby making it an official, genuine document. There are several different types of property deeds:
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Warranty Deed
A Warranty Deed is the most common type of deed. This deed transfers ownership as well as ensures the buyer that you have a good title on the property. In other words, the seller guarantees that no other party holds interest in the property, unless it is noted in the deed. Typically, before a Title Company will give a buyer Title Insurance, the will need to acquire a Warranty Deed.
Limited Warranty Deed
Although similar to a Warranty Deed, a Limited Warranty Deed only covers the time period that the current owner has owned the property; it does not cover the time period the property was owned by prior owners.
Quit Claim Deed
A Quit Claim Deed transfers all interest in the property. Mainly used by divorcing couples, Quit Claim Deeds allow one spouse to sign over all rights to the property over to the other spouse. These claims do not include a guarantee to the buyer that the party does or does not own an interest in the property.
Trust Deed
A Deed of Trust is different than other types of deeds because it’s not used to transfer ownership of property. Instead, a Trust Deed acts more like a mortgage, transferring ownership of land to a “Trustee.” Usually the “Trustee” is a Title Company that holds the property as security for a loan.
With a Trust Deed, the title is transferred to the borrower only when the loan is paid off. If the loan isn’t paid or the borrower defaults on the loan, the “Trustee” has the power to sell the property and pay the lender for the property.
Life Estate Deed and Transfer on Death Deed
A Life Estate Deed is used when an owner wants to leave his/her property to another person after his/her death. This deed names a “remainderman” as the new owner of the property. If the owner decides to sell the property before he/she dies, then he must get permission from the remainderman by having him/her sign the new deed as well as share the profit from the sale of the property.
A Transfer of Death Deed was created to avoid the problems that can sometimes arise with the Life Estate Deed. This new deed gives the owner of the property full power over the property until his/her death. In other words, the remainderman does not have possession or any legal right to the property until the living owner dies. If the living owner decides to sell the property before his/her death, he/she does not need the consent of the remainderman, nor do they need to share the profit from the sale of the property.
Survivorship Deeds
A Survivorship Deed is used by couples who want to make sure that upon their death complete property ownership goes to the surviving partner. However, when the surviving owner dies, the property will be subject to whatever is stated in the couples Will. A Survivorship Deed is not a good choice if the estate is going to be equally divided among children, because with this deed the last surviving member named in the deed gets complete ownership of the property.
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