Purchasing real estate can be a very stressful time. Your agent or other advisers may be using terms you are unfamiliar with, especially if it is your first time purchasing property. A lot of first-time buyers think property deeds and titles are the same things, but property deeds are a separate legal concept.
What are Property Deeds?
A property deed is a document representing ownership of property. This document is a written and signed tool used to transfer the ownership from an old owner to a new owner. This deed includes a description of the real estate or property involved, the names of the prospective parties, and the signature of the person who is selling the real estate.
Elements of a Deed
There are certain aspects of a deed that are legally required.
- The deed must be in writing.
- The person selling the property must have legal capacity over the property. The person buying the property must be able to receive the property and be able to make a valid contract.
- Both parties must be ascertainable.
- The property and real estate involved needs to be described in detail.
- The deed must include all of the necessary legal languages to transfer the property.
- The deed needs to be signed by all parties if the property is owned by more than one person.
- This deed needs to be legally delivered to the person purchasing the property.
- The person purchasing the property must legally accept the deed.
Different Types of Deeds
There are multiple types of deeds to use depending on the situation. The deed is categorized by the type of title warranty being provided by the person selling the property. Here is a list of the most common deeds and what situation you will find them in.
1. General Warranty Deed
A general warranty deed gives the person purchasing the property the most protection. This type of deed guarantees the buyer protection from any prior claims or demands from the property in the past. This deed guarantees that the person selling the property has legal rights to the land can sell it. It also guarantees the property is free of any liens or encumbrances. This guarantee means the new owner will have a quiet possession of property with proof of previous titles.
2. Special Warranty Deed
A special warranty deed is a more specific deed. This type of deed protects the future owner from any problems associated with the most recent owner but does not include protection from any liens of encumbrances from owners before them. This means that only defects occurring during the current ownership are warrantied, and the future owner is not protected from issues relating to a prior owner. It is beneficial to insist on a general warranty deed to ensure your safety when purchasing the property.
3. Quitclaim Deed
A quitclaim deed is also known as a non-warranty deed. This deed offers the least amount of protection and is agreed upon by parties who are already in a personal or professional relationship. If for some reason the property contains a defect, the new owner will have no legal options against the seller if they utilized this type of deed.
4. Special Purpose Deeds
A special purpose deed is found in court proceedings where the deed is currently in the hands of someone in an official capacity. These deeds typically do not offer much protection to the person purchasing the property and act similarly to quitclaim deeds. Some special purpose deeds are administrator’s deeds, executor’s deeds, sheriff’s deeds, or tax deeds.
In Conclusion
If you intend to purchase property, it is important to educate yourself on the types of deeds that may be involved. You will equip yourself with the knowledge needed to protect yourself and make sure you know what you are getting into with the property.
How Proof of Ownership is Established
