Documentation makes the world go ‘round. Owners, sellers, and buyers all need access to the essential information contained in real property documents for decision making, due diligence, and peace of mind.
Real property documents are typically split into three categories:
- Deeds
- Property tax reports
- Mortgage records
Each type of document contains information about the property in question. While some data is duplicated, each category covers specific details about the various aspects of property ownership, allocation, taxation, and transfer.
Here is a breakdown of each category of record, what it is, why you need it, and how to access it.
Deeds
A property deed is a written, signed legal document that transfers ownership of real property from the seller (previous owner, grantor) to the buyer (new owner, grantee). Back in the day, the transfer was a ceremonial act called a “livery of seisin,” indicating the importance of property in wealth, social standing, and prestige.
A livery of seisin consisted of the grantor handing a twig or clod of dirt from the land to the grantee. Today, there is no need to get your hands dirty. Deeds are documents transferred as titles, the title being a concept embodied by the physical record of the deed.
Deeds have several required elements.
- A deed must be in writing. There is no legal requirement about how the deed is presented; therefore, it can be a handwritten letter, a document printed from a computer, or it can exist as a digitized record.
- The grantor or seller must have the legal right to transfer the property. He or she must be competent to make a valid contract.
- The grantee or buyer must have the capability to receive the grant of property, meaning they must be competent as well.
- Grantors and grantees must be identified in a way that can be ascertained and verified.
- The property must be described so that it is recognizable as a unique property.
- Operative words of conveyance must be included in the deed. That means all the legal language must be there.
- Both the grantor and grantee must sign the deed to effect the transfer, and the deed must be delivered legally to the grantee. The grantee must accept the deed to finalize the transfer.
There are several different types of deeds: warranty deeds, special warranty deeds, quitclaim deeds, grant deeds, and bargain and sale deeds.
Different states have varying recording requirements. A “race” recording act state says that the person who records a deed first has the superior claim of ownership of the property. A "notice" recording act state settles the priority of ownership when one person fails to file ownership interest, and a second person purchases the property without knowledge of the first person's claim. The second person receives title to the property.
In “race-notice” act states, race and notice recordings are combined, and things quickly become complicated.
Deeds are public records, many of which are accessible online. You can also find them at the county courthouse of the county where the property is located.
You need property records in cases of disputed ownership, resolution of boundary line disputes, clarifying easements, settling liens, and cleaning up issues with mortgages and foreclosures.
Property Tax Reports
The property tax report for a piece of property contains a record of all property taxes paid on the property. The property tax is also known as the mill rate or mill levy. Because it is a tax, property taxes tend to (mostly) increase or (rarely) decrease over time. Even after the property note is paid off, you still have to pay property taxes.
Property tax for real (as opposed to personal) property applies to immovable property: the land and any permanently attached structures like houses and other improvements. You need the property tax record to ensure there are no back taxes owed on the property and to prove taxes were paid.
The property tax record is useful for determining if the property has been valued correctly. Along with the valuation and tax calculation, the property tax record shows how the tax was levied, assessed, and collected.
Depending on the state, the property taxes may be collected at the state level, or they may be collected at the county or municipality level. Accessing the property tax report shows jurisdiction. The amount of tax is calculated by multiplying the property tax rate by the current market value of the property under consideration.
Many buyers choose to roll payment of property tax into the mortgage payment. Then the mortgage company holds the funds in escrow to pay out annually to the tax district.
Property tax reports can be found online. They include several elements.
- Tax and/or APN number
- Legal description down to the lot, block, section, and subdivision
- Lot size in square footage or acreage
- Improvement size
- Year built
- Number of rooms
- Census tract number
- Assessed value
- Sales information - document number, date, and sales amount
Researching the property tax record can be a crucial tool in selling and buying property.
Mortgage Records
The mortgage record for a piece of real estate contains the history of the mortgage details from previous owners. It is a public record accessible in print, digitally, or online.
Mortgage records are a convenient tool for buyers to bid appropriately on a foreclosed home, gain insight into the current owner, and determine how much that owner borrowed to purchase the property.
Mortgage records delineate the transfer of the mortgage between lending companies as well. Accessing the records can help buyers determine the current actual value and make an appropriate offer. Mortgage records can also convey other useful information, like if the sellers are divorcing, how often the property has been listed, removed, and re-listed.
Access public mortgage records by gathering data about the county where the property is located and accessing the information at the courthouse, clerk’s office, or if it is held by the town. Often, you can fill out an online form to access online records and search them.
Real property records show ownership, payment of taxes, and the movement of property between owners, placement on the market, and other data that can provide a competitive advantage dealing in property. The records are generally public, and many are accessible online through services like CourthouseDirect.com.
Property records are crucial to owners and buyers to ensure the smooth transfer of title, full payment of taxes, and reasonable valuations.
