Buyers about to purchase their first home, experienced real estate professionals, and property owners selling tracts that have been in the family for generations, all have an interest in understanding the transfer of land titles. Conveyance is the term applied to the process of ownership transfer. It’s a complex process, involving for most people one of their most valuable assets. Whether buying or selling, it helps to understand the basics.
Deed Property Transfers
The entire transfer process revolves around the property deed. This document acts as the proof of transfer when property changes hands. For a deed to be binding it must contain the following:
- Language that specifies it is a deed
- A legal property description
- The current property owner’s signature along with the fact they are passing it to a new owner
- Identifying information for the new owner
Deeds themselves can be very short, but they may include supplementary information. After completion, the law requires each owner receive a copy, and for the deed to be filed with the appropriate office.
Deeds and titles are not the same thing. A title is the legal right to property. It could mean complete ownership or only a portion, as when multiple heirs all have access to and use of a property, but no one has the sole right to sell it or borrow against it. Deeds are the vehicle through which that transfer takes place.
Every time a property changes owners, a record is supposed to be submitted to county officials. Sometimes a transfer is not submitted, or is submitted with incorrect documentation, leaving gaps in the title that complicate subsequent transfers. Purchasers buy title insurance to make sure there aren’t any liens, encumbrances or other problems that keep them from obtaining a good title. Title status decides what type of deed is necessary for title transfer.
How Proof of Ownership is Established
General Warranties
A general warranty completely and explicitly transfers the land title to the new owner. Title officers trace title transfers back to the property’s first owner and ensure no one else has a claim and there are no liens outstanding. Land and homebuyrs can prevent later ownership disputes by always obtaining a general warranty when they buy property. The buyer receives the right to the entire property, is guaranteed to be able to enjoy it without ownership challenges, and is protected if someone comes forward saying they have a claim.
Special Warranties
When most but not all of the documentation necessary for title transfer is present, sellers may offer a special warranty deed. It may not offer all the covenants of a general warranty deed and can’t guarantee the absence of long-forgotten liens or encumbrances.
Quitclaim Deeds
Quitclaim deeds make no warranties concerning the title. They convey the seller’s ownership, but if any other person or entity has an interest in the property, they could interfere with the buyer’s use and enjoyment. Quitclaim deeds are useful when transferring family land to other members, to give one spouse ownership during a divorce or between business partners with a longstanding relationship. Quitclaim deeds only require the signature of a notary. In Texas, a quitclaim deed just transfers the property interest the seller has at the time they sign the deed.
Property Transfer Overview
Property is conveyed for a number of reasons. Sometimes during foreclosure, lending institutions auction interest in the property for cash. Business interest sales may follow a different process from that of a young couple buying their first home.
If you are a property owner desiring to transfer your interest, you will probably hire a title company to provide title insurance. If the transfer involves general or special warranty deeds, a lawyer must complete the title investigation and the transfer must take place in front of witnesses.
Real estate attorneys determine tenancy during title work. Often more than one person is purchasing a property, as in the situation of a married couple. The title specifics affect what happens if one owner dies. In joint tenancy, if one owner dies, ownership transfers automatically to the others, whether they have a will or not. With tenancy in common, if one owner dies, their interest in the property passes to their heirs.
The real estate attorney will confirm your property’s legal description, ratify that you are an owner with a good title and prepare transfer documentation. Closing usually takes place at the attorney or title company’s office. All parties sign the new real estate deed and the preparer files it with the appropriate office, at which time the new owner receives a copy.
Transferring a Deed in Texas
If you’re selling property in Texas, complete the following steps:
- Select which type of deed you wish to provide the buyer.
- Create a transfer document that contains the deed transfer date and the legal names of the grantor and grantee, usually the seller and buyer respectively.
- Add the property’s physical address and subdivision or the full legal description if you know it.
- If you are providing a general or special warranty deed, submit your paperwork to a real estate attorney or title company. They will ask you for any clarification or documentation and prepare the rest of the documentation necessary for title transfer. Documentation will require your signature for completion.
- If you’re using a quitclaim deed, research requirements by county and obtain a sample deed form. Complete it according to local regulations and meet with the grantor before a notary public.
- Title companies and land attorneys often submit completed Texas warranty deeds to the County Clerk’s office on behalf of the buyer. If you used a quitclaim deed, you may need to turn it in yourself. Filing fees average around $25 per page. Find exact fees and filing locations on the Texas Secretary of State’s website.
Buyer Beware
Property transfers happen every day across the nation, but each situation is different. In some situations buyers may feel they have all the information and hope to save money by skipping steps, but that can be a costly mistake. Property transfers are large transactions, so buyers and sellers both benefit by making sure they complete all state requirements.
