Property Deeds: Everything You Need To Know
Andrew Dehan6-Minute Read
September 17, 2021
What is a deed to a house? There’s a lot of paperwork to complete when selling or buying a home, including the property deed. Read on to learn what exactly a property deed is, the difference between a property deed versus a title and whether you need a warranty deed, quitclaim deed or something else.
What Is A Property Deed Or House Deed?
A property deed, or house deed, is a legal document that transfers ownership of real estate from the grantor (seller) to the grantee (buyer). Property deeds are the legal tool of defining ownership. When a property or house is sold, the buyer and seller sign the deed to transfer ownership.
A property deed must accompany every purchase of a property and be completed, notarized and filed on public record to be legally valid. Property deeds contain a detailed description of property lines, specifically outlining which property the deed is for and who it belongs to.
Deed Vs. Title
When you own a home, you own both the deed and title for that property. In real estate, to hold title means you have ownership and a right to use the property. Titles aren’t physical, but conceptual. The deed is the physical legal document that transfers ownership. It shows who you bought your house from, and when you sell it, it shows who you sold it to.
What Is Included In A Property Deed?
There’s no specific template needed for a property deed. It’s required to be a written document. Specific requirements vary by state, but many property deeds contain similar info. Here are some of the common types of information:
- Names and addresses. The grantor (seller) and grantee (buyer) list their names and addresses for further contact.
- Description of the property. This is the legal description of exact property boundaries, referencing common points like roads and sewer lines.
- Signature of the grantee. The grantee must sign with their full name, leaving no doubt who they are. The signature must be consistent with the grantee name listed in other documentation.
- Words of conveyance or granting clause. This clause transfers ownership to the grantee. It lays out the grantee’s rights and if any other people are also taking title.
- Consideration clause. The deed contains a clause stating that the grantor received something in return for the property. This is usually money, and the amount must be listed here. There are ways to obfuscate the amount paid, acceptable or common in some areas. If the property was gifted, a phrase like “for love and affection” is used.
Other common information depends on the type of property. If the house is in a plotted subdivision, the property deed will contain the name of the plot and information about it. There also may be listings of conditions or reservations that go along with the property transfer.
What Does A Property Deed Look Like?
What a property deed looks like depends largely on the property. Where the property is located, how large it is, any indication of shared use – all these factors affect the size of your property deed. For most people, their property deed is one to two pages. It’s a physical legal document containing the information listed above.
Types Of Deeds
There are several types of property deeds, with the difference coming down to the covenants and warranties conveyed by the seller. Some property deeds offer more protections to the grantor, and others favor the seller. Depending on the state of the property, the title and any encumbrances, different deeds may protect against issues that could arise.
General Warranty Deed
A general warranty deed promises that the grantor has complete legal ownership. With a general warranty deed, the property is free and clear of any liens, debts or encumbrances. The grantor claims to have complete ownership before transferring it, making a general warranty deed the safest for the grantee.
A general warranty deed gives warranty of title, conveying title to the grantee and assures that the title is the most superior claim on the rights to the property. It also gives warranty against encumbrances to the land, stating that the only mortgages, liens or easements are those listed in the deed. This makes it so the grantee is fully aware of what they’re getting.
If it’s later discovered that there are defects to the title, the general warranty deed means that the grantee can sue the grantor for damages. The grantor is also liable for any unstated encumbrances found after the conveyance of property. This layer of protection assures the grantee that all rights and possible debts on the property are in order, and that the grantor must fix any problems that arise.
Special Warranty Deed
While a special warranty deed may sound like it’s higher in quality than a general warranty deed, it’s not. Special warranty deeds offer less protection to the buyer than a general warranty deed. It guarantees only that the property wasn’t encumbered while the seller had ownership. This means that there could be encumbrances (liens, mortgages, easements, etc.) from prior to the grantor’s ownership.
A special warranty deed is frequently conveyed with the phrase, “Grantor remises, releases, alienates and conveys.” With a special warranty, the grantor is not obligated to address any title defects from before they owned the property. The grantor’s only on the hook for what occurred during their time of ownership.
Special warranty deeds are usually used by temporary owners who don’t occupy the land. Trusts, business managers, banks and associations often use special warranty deeds to avoid liability. With a specialty warranty deed, they don’t have to worry about title defects or encumbrances leftover from when they seized the property.
Quitclaim deeds are the next step down in warranty deed coverage. Where general warranty deeds assure a clear title and no unknown encumbrances and special warranty deeds cover the grantor’s time of ownership, quitclaim deeds carry no warranty at all.
Quitclaim deeds only convey the interest the grantor had in the house. They may convey full title, but nothing is guaranteed. There is no protection for the grantee and no liability for the grantor.
In the past, quitclaim deeds were used on unexplored and unclaimed land. Quitclaim deeds are fast and efficient, but if there’s a defect in the title, the grantee has no legal recourse against the grantor. Quitclaim deeds still have a place. They can be used to amend defects in the title quickly and efficiently. After the title is established, a general or special warranty deed can be issued to address transfer of ownership and purchase.
Special Purpose Deed
Special purpose deeds are types of deeds usually used in court or with a person acting in an official capacity. In general, they offer no real protection to the grantee and are used only in specific circumstances. Here are some of the most common special purpose deeds:
- Tax deed. A tax deed grants ownership of the property to the government when taxes are not paid on the property. The government then auctions off the property to cover the unpaid taxes.
- Deed in lieu of foreclosure. In order to avoid foreclosure proceedings on an unpaid mortgage, the borrower conveys the property to the lender, often a bank, using a deed in lieu of foreclosure.
- Deed of gift. Just as it sounds, a deed of gift is used to transfer ownership without compensation from one person or institution to another.
- Sheriff’s deed. Similar to a tax deed, a sheriff’s deed conveys ownership to a buyer at a sheriff’s sale. The sale of the deed goes toward paying a court judgement against the property owner.
- Executor’s deed. This deed is used when someone dies with a will. The estate executor uses this deed to convey title or property to the grantee stated in the will.
- Administrator’s deed. When someone passes without a will, a court appoints an administrator who uses this deed to convey title or property to a grantee.
The Bottom Line: You Need A Property Deed To Buy Or Sell A House
Property deeds vary depending on the property being conveyed. When shopping for real estate, knowing the kind of deed being offered can tell you about the property. General warranty deeds offer the most protection for buyers. At the opposite end of the spectrum, quitclaim deeds offer the least protection for buyers and come with no liability for sellers. No matter what, you need a property deed to buy or sell a house.
Before you sign a deed, you should know what protection it’s granting you as the buyer. If you’re the grantor, it’s important to know what you’re liable for.
If you’re ready to buy a home, speak with an agent today.
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