A deed is not a title. A deed is a signed document that establishes that an asset has been transferred. Because this article centers on real estate, the specific asset we are discussing is a home or real property (i.e., land). You will have a title that serves as proof of ownership when you own either. Having the title enables you to sell the asset. For example, if you have ever borrowed money to buy a car, the lender may have held onto the title until you paid off the loan.
Now that you understand both terms, you can see how a deed transfers the title from the seller to the buyer. To take it one step further, we will go over three different types of deeds you may come across when buying real estate.
Warranty Deeds
These are very common, and that is why we started with them. This is a document that gets signed by both the seller and buyer. The seller states that they own the property, possess a clean title, and have no other claims to the property. For instance, there are no creditors who have placed liens on the house. Encumbrances are claims against the property that could inhibit you from being able to sell it. When the seller signs the warranty deed, they declare that there aren’t any.
Quit Claim Deed
Although Quit Claim Deeds are similar to warranty deeds because they transfer someone’s interest in a piece of property to someone else, they have one significant difference: they do not claim whether there is a clean title. Why would anyone be willing to accept this? Because they likely know the person who is transferring the title to them.
For instance, former spouses may use a Quit Claim Deed to transfer ownership of a home during a divorce. Both people could have been part of the original sale and are confident that there are no encumbrances on the house. These could also be utilized if someone gives the property to another family member as a gift.
Trustee’s Deeds
There are also scenarios where you can transfer your property into a trust. When you put something into a trust, the trust owns it. Even though you are not transferring the property to a physical person, ownership of the property is changing nonetheless. Your attorney will assist you with this process, but this can be accomplished through either Warranty Deeds or Quit Claim Deeds.
Auricchio Law Offices
A real estate attorney assists, advises, and supports you during a real estate transaction. You need to be able to look to a reliable source and ask whether the property has been legally transferred to you. If you have questions about encumbrances that could impact your title, your attorney is available to answer them. Contact the Auricchio Law Offices to schedule a consultation regarding your next real estate transaction.
Auricchio Law Offices
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