Types of Deeds in Real Estate

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In legal terminology, a deed transfers ownership of property. A deed can take several forms. Each serves a different legal purpose depending on the property’s history and the presence of liens. Or any encumbrances such as a mortgage. A deed usually appears in one of six types of real estate transactions. You should learn about the different types of deeds and determine which is best for you. You should know the Types of deeds in real estate and how to take the title in California to protect you.

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Types of Deeds in Real Estate

A real estate transaction can sometimes resemble buying an umbrella a street vendor sells on a rainy day. Heavy rain and fast winds made it too rushed to inspect and test the umbrella.

Hiring Attorneys at a Real estate group can ease the choice of your deed and real estate agreements.


What is the difference between a property deed and a property title?

While searching for a property to buy, once you find one, you begin hearing a lot of real estate jargon.

The chain of title. Encumbrances, liens, and back taxes. The notarization of deeds. The first time you buy land; this can be a little overwhelming. What is the chain of title? Deeds – plural? Is there more than one? What is the best one to use?


Property chain of title

Keep in mind that a title is different from a deed. A title is the legal proof of ownership of a piece of property. The title implies legal ownership of a property. A chain of the title refers to the previous land owners when land investors like me talk about it.

You must establish the chain of title before purchasing rural vacant land. Thus, you can go back at least thirty to forty years to track the property’s previous owners. Nobody remains in the dark about who owned the property.

A title company can assist you with this or by using the property’s parcel number (APN) to search by yourself. It’s best to hire a title company if you’re new to buying land since it is complicated.

In establishing a chain of titles or hiring a title company to do that for you, you should check the Mineral Rights. This article explains why it’s essential. Hence, a title is a document representing your legal rights to own something, in this case, a plot of land. The chain of title you established proves that.


What is a property deed?

It is a legal document that is used for transferring ownership. The title and the deed are intertwined. According to the Statute of Frauds, a deed must be a physical document.

In certain transactions, all parties must sign written contracts, according to the Statute of Frauds. Any other parties involved in the deal (such as a notary) must also appear in the contracts. Such as the grantee/buyer and the grantor/seller. It ensures the parties and assets are protected and that there is enough evidence to support the contract in court.

A deed documents a grantor and a grantee’s agreement to transfer property ownership to the grantee/buyer. It is necessary to record the deed in the County’s Clerk of Records office after all parties have signed it. If you fail to record the deed, you don’t lose ownership. As a result, you may have difficulty proving your ownership and may have to deal with various consequences. Such as the potential loss of your property to a county tax lien sale.

Record the deed if it has been notarized and signed. Third-party services are available in some counties for recording deeds online. Some counties must file deeds in person at the county records office. The county can tell you which camp you are in if you call them.


What is the best deed to use for real estate?

Generally, a deed is a legal document that transfers real estate ownership from one person or to another person and entity. Although the requirements for a legally valid deed vary widely from state to state, a few different types of deeds are used consistently in real estate transactions, including warranty deeds, grant deeds, and conveyance deeds. Additionally, there are different methods by which one or multiple persons can acquire title to real estate by one of these deeds.

  • Quitclaim Deed
  • Deed of Trust
  • Warranty Deed
  • Grant Deed
  • Bargain and Sale Deed
  • Mortgage Deed

In the following list of deeds, we explain the details of the Types of Real Estate Deeds as well as when to use them:


What is a quitclaim deed?

The third type of deed is usually used by family members, friends, or acquaintances. Sometimes, we refer to this type of deed as a non-warranty deed. People who know each other most use this deed. Additionally, one can use it without exchanging money or selling goods.

It is almost impossible for a grantor to get protection from a Quitclaim Deed. It’s impossible to guarantee that the title chain will continue and that the property will belong to the owner. Or that it will be free from liens and debts. As far as the title’s quality is concerned, there are no guarantees.

A Quitclaim Deed can also correct any problems with an original deed. Such as misspelled names, missing signatures, and not recording the document with the county.

The Quitclaim Deed is not an excellent way to buy the property unless it’s from someone you trust and know. As much as possible, you want this transaction to be as risk-free as possible.


What is the deed of trust?

Beneficiaries are the individuals who enjoy a trust deed in which the title to an asset passes from the trust or to the trustee. Trust deeds act as security to protect a loan transferred by a trust or to a trustee in a mortgage scenario instead of mortgages. When the borrower defaults on their loan, the trustee agrees to sell the property to repay it.

Borrowers keep the fair title, meaning they can enjoy and use the property (while the trustee retains the legal title, thereby gaining legal responsibility).


What is the warranty deed?

These deeds are designed to protect the buyer from any problems arising in a real estate transaction. Warranty deeds used frequently in the purchase and sale of real estate transfer ownership of said property from the seller to the buyer. These documents also constitute explicit guarantees, or promises, that the seller makes to the buyer about real estate transactions. For example, warranty deeds typically contain a clause that the buyer transfers good title to the real estate to the seller, e.g., there are no conflicting claims to the property or problems with the seller’s title to the real estate.

This is the best property deed you’ll ever see. Real estate sales use it. Grantors/sellers guarantee an essential feature to grantees/buyers in this type of deed. Title issues and liens against the property are not present. It’s not for the time the buyer owned the property, but its history!

There is nothing short of incredible about this.

According to the grantor, the property has never had any title issues throughout its history! In this deed, the grantor informs the grantee that the property is free of debt and liens and entitled to be sold by them.

The grantor will be liable if the grantor proves the title chain of the parcel at any point in the future after the transaction. Or compensates the grantee for any unsettled back taxes or liens. Regardless of how long you decide to own the property, you are guaranteed your investment for life.

It is the best form of protection for a land buyer to have a Warranty Deed. Compass Land USA uses this deed for our buyers to give you complete peace of mind about your buy.

You should ask the grantee about a Warranty Deed if you want to buy a property. Why is this important? Is there anything you don’t know about the property? Does the property have any current debts or liens?

Don’t relinquish your land-buying dream because you can’t get your Warranty Deed. A Warranty Deed isn’t applicable in certain situations. You’ll have to research the property more, so you’ll have to be comfortable with the property’s history before proceeding.


What is a grant deed?

The grant deed is also called the special or limited warranty deed. A general warranty deed provides all the same protections and guarantees except for one crucial difference. It only covers the period during which the seller owned the property. The buyer must deal with a lien on the property left by an earlier owner. And the seller will have no recourse if a title claim is made against the property. The insurance policy would likely cover the cost of defending the title if the buyer purchased title insurance.

Grant Deeds can transfer property rights to trusts or businesses. Those are great to use when buying land from a private owner or company, but it doesn’t make sense if you’re purchasing land as an individual.


What is a bargain and sale deed?

A bargain and sale deed is the fourth type of deed. There are only a few instances in which this deed is appropriate. The grantee receives the property from the grantor, as with the other types of deeds mentioned here. It conveys the right to sell the property later through a Bargain and Sale Deed. Title guarantees do not apply to it, which is the legal title to the property.

An agreement to buy and sell transfers the right to sell the property in the future without transferring the title to the grantee.

Thus, you have no assurance that the property is free and clear of debts, liens, or other encumbrances. Grantors are not responsible for anything before or after their property ownership. Grantors are handing over their property.

It is not guaranteed that the seller will own the lot, but it is possible that it can be conveyed. This deed would not be suitable for buying a property!


What is a mortgage deed?

Homeowners and banks sign mortgage deeds, which allow lenders to put liens on their properties if they fail to repay the loan. A mortgage deed represents the security of a loan; a mortgage payment contributes toward the debt, and the house serves as collateral.

Financial institutions hold the legal title to a property during the loan repayment period when a mortgage deed is in effect.

There are several types of real estate deeds, each serving a different function, offering a different level of protection when transferring a piece of property. Understanding the difference between deeds can be very helpful in real estate transactions.


Structure Of a property deed

There will be slight structural differences between the Types of Real Estate Deeds we’ve discussed.:

  • Names of grantors and sellers (and any more sellers)
  • Name of grantee/buyer (and any more buyers).
  • Identifying the property’s location
  • Property’s legal description
  • Grantor/seller statement describing their legal right to transfer title to the property
  • A statement stating that the seller/grantor will take all necessary steps to transfer ownership and title to the grantee/buyer
  • It is common to find a statement describing the property as being free of liens and debts in a warranty deed or special warranty deed.

You can create your deed using the previous deed that transferred the property as a guide. To make sure a deed document is binding, consult a lawyer or paralegal if you’ve never bought or sold a home.


Final words about the types of deeds in real estate

You should understand the difference between a title and a deed before transferring your property now that you understand the types of deeds. Know what types of deeds in real estate are available and take a title in California to protect you from real estate scams.

It also identifies your rights based on the deed and title. Besides protecting you against liens, encumbrances, and title clouds, title insurance protects you against most problems associated with unwarranted deeds. A professional real estate deed attorney will also provide more protection. This article will be helpful and informative, but legal matters can be complicated and stressful. A qualified real estate attorney can guide you about all particular legal needs and explain the law. Take the first step and contact our local real estate attorney to discuss your particular legal situation.

Hedy Ghavidel

HEDY GHAVIDEL Managing Attorney  Roseville Office  1-866-471-6981  info@attorneysre.com Bio...

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