Buying and selling a home is a complex process. The buyer must find a real estate agent, search for a home to buy, negotiate a price, secure a loan and arrange a home inspection. A seller must prepare their home for showing to potential buyers, evaluate offers, choose a buyer and make requested repairs. While all this is happening, so is an important legal process: Attorneys are working to ensure a smooth transfer of the house from the seller (the grantor) to the buyer (the grantee) through transfer of the property deed.
What Is a Property Deed?
A property deed, or property title, is a legal instrument that assigns property ownership. Whoever owns the deed owns the property. Therefore, when an owner sells a house, they must transfer the property deed from their name to that of the buyer.
A property deed is an important tool, because many ownership disputes are settled by simply checking the name on the deed. Every deed is recorded for posterity in the property’s county courthouse, and anyone can access the records to check the history of a property’s transfers.
What Is a Grant Deed?
A grant deed (also known as a special warranty deed) is a property deed that makes two guarantees:
1. The property has not been sold to anyone else.
2. The house is not under any liens or restrictions that have not already been disclosed to the buyer.
This means that there are no legal claims to the house by third parties and no taxes are owed on the property that would restrict its sale.
Elements of a Grant Deed
While the components of a grant deed vary by state, a number of basic elements must be included for the deed to be valid. The deed must:
§ Be written.
§ Include a granting clause that actually transfers the title.
§ List the names of the buyer and the seller.
§ Describe the property changing hands. The description should include the address and boundaries of the property or its lot number.
§ Be signed by the seller, given to the buyer while the seller is still alive and accepted by the buyer. This last process is called execution, delivery and acceptance.
While not required, it is accepted practice that a notary public witness the transfer of the deed.
Other Types of Property Deed
Warranty deeds are similar to grant deeds but include an additional guarantee that the seller is willing to defend the title against any third-party claim, even by a prior owner.
Quitclaim deeds reject ownership that any would-be seller might have in the property. This type of deed is most often used in divorces or when one spouse comes into a marriage already owning a property. The nonowner spouse would be asked to sign a quitclaim deed to ensure that he or she will not lay claim to the property in the future.
Tax deeds are used when a property has been seized due to nonpayment of taxes. When that property is sold, the government will use a tax deed to transfer ownership to the buyer.
Gift deeds transfer property without any monetary transaction, usually between relatives.
The deed in lieu of foreclosure may be used when an owner is in danger of losing their home to foreclosure. The owner may elect to transfer the deed to the lender, thus avoidin
g the lender foreclosing on the property.
Source: realtor.com®
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