When you buy a house for the first time, it can be exciting to dedicate all of your focus to moving in and unpacking in your new space. But, there are a few legal considerations to take care of before you can get the keys. One of the most important components of buying a house is obtaining the house deed, which will be signed as part of the closing process.
A house deed is a legal document that grants you ownership of the new property. Deeds are often confused with titles and other portions of the real estate transaction, but each component has its own purpose. Below we will outline exactly what a house deed is so that you can confidently approach and finalize your first real estate purchase.
What Is A House Deed?
The deed to a house is a legal document that transfers ownership from the former owner (the grantor) to a new owner (the grantee). House deeds are often called property deeds and are a crucial part of the closing process in any real estate transaction. They are typically transferred at the time of closing.
Deeds are the primary way homebuyers can indicate true ownership and protect themselves in points of real estate dispute. The buyer and seller of a property should always fill out a house deed to verify the transfer of ownership is accurately completed during a transaction. The deed should then be notarized and filed with the county recorder’s office to maintain public record.
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Importance Of A House Deed
While a house deed might seem like just a piece of paper, as it turns out, it is the single most important document that proves home ownership. The deed is used to indicate legal ownership if there is a dispute regarding property interest. Unfortunately, even if you think you hold interest in a house, it doesn’t mean anything unless you are listed on the deed. Because of this, the proper recording of deeds is critical. Any party involved in a real estate transaction should verify that a deed is completed and then recorded properly to reflect any transfer of ownership.
What Does A House Deed Look Like?
A house deed is a standard legal document and will generally look like a contract. Deeds contain specific information about the property in question, such as:
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A statement indicating that the document is a deed
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Description of the sold property
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Grantor and the grantee information
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Property seller signature
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A notary stamp (when required by state law)
Note that the buyer is not required to sign the house deed — instead, buyers are presented with the final document after the transaction is complete.
Types Of House Deeds
House deeds typically fall into two categories: private or official. Private deeds usually take place between two parties, such as individuals and businesses. Official deeds are executed in a court or other type of legal proceeding.
Several types of house deeds can be used, each designed to serve different circumstances. Here are a few common types of house deeds:
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General Warranty Deeds
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Special Warranty Deeds
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Quitclaim Deeds
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Special Purpose Deeds
General Warranty Deeds
The most commonly used type of house deed is the general warranty deed. It’s a popular option because it offers the highest level of protection for the grantee, which is the person buying or receiving the property.
With a general warranty deed, the grantee has a right to the property free and clear. The grantor, or the person selling or gifting the property, is guaranteeing that there are no liens or easements against the property. If it turns out that there are claims against the property, the grantee can’t be held liable.
Special Warranty Deeds
A special warranty deed offers the grantee some protection, but not as much relative to a general warranty deed. The special warranty deed guarantees that there are no title issues during the time period the grantor owned the property. In contrast, a general warranty deed extends this guarantee throughout the property’s history, even through prior owners. Special warranty deeds are often used in the case of home foreclosures when grantees buy properties from banks.
Quitclaim Deeds
A quitclaim deed is used when a grantor wants to transfer any interest they may possess in a property. They may or may not be the legal owner. Because of this, grantees are offered the least amount of protection. Not only do they get any promises about the property title, they don’t have any legal leverage if a problem arises.
Because of this, quitclaim deeds are seldom used when there’s a financial exchange for the property. They are often used in family matters, such as when a married person signs a quitclaim deed to convey their share of property interest to their spouse.
Special Purpose Deeds
Last but not least, special purpose deeds are typically used in official matters, and they also do not offer protection for the grantee. Executor’s deeds, tax deeds, and sheriff’s deeds are all examples of special purpose deeds used by law officials to sell property in special circumstances.
House Deed vs. Title
A house deed and title are two commonly confused aspects of the homebuying process, and rightfully so. Both a house deed and a title pertain to ownership of the property, and the two terms are frequently used interchangeably or simultaneously. Despite these common mix-ups, a deed and a title refer to two slightly different pieces within a real estate transaction.
It is crucial to understand the differences between these concepts before you close on a house. Not only can this understanding better prepare you for the closing table, but it can also ensure you know how to legally protect yourself during the transaction. After all, one thing a house deed and title have in common is that they both directly impact the ownership of the property.
What is a Title?
A title is an owner’s legal right of ownership and the ability to sell. When a buyer legally purchases a home, the title will be transferred to their name. Businesses and other legal entities can also hold property titles.
Titles are also used to discuss ownership of other asset types, such as cars or boats. However, these comparisons can be slightly confusing. A car title often refers to the legal document you receive when purchasing a vehicle, naming you the owner. In real estate, a title is more of a concept than a piece of paper.
Essentially a real estate title is a bundle of rights granting someone ownership of a property. When a real estate transaction is finalized, the buyer will be granted the title, but they will not go home with an extra piece of paper. Instead, they will become the title holder of the home for legal purposes.
Differences Between a Deed and Title
One way to think about the differences between a deed and a title is to look directly at the words themselves. A deed is a document, while a title is just like any other official position (attorney, manager, dean, etc.). The title to a property means you are officially the owner; the deed proves that statement.
The frequency at which these two terms are used in a real estate transaction can make it difficult to keep things straight. But again, they differ in purpose and practice. Here are a few key highlights to help as you attempt to commit these terms to memory:
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Physical Document vs. Legal Term: The key difference, and perhaps the easiest to visualize, is that a deed is a physical document while a title is only a concept. When you close on a house, you will walk away with the deed (a physical document) in hand. The title comes into play before the actual close during a title search. The title search is a process of searching public records on the property to make sure that the seller is the property’s rightful owner. In other words, it ensures that they have legal title to the property and have the right to sell it to you. The search can also reveal whether or not there are any liens or claims on the property. If there are, you will likely want to walk away from the deal as the title is not clear.
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Intended Purpose: Both a deed and title are crucial when determining home ownership. The deed will prove that the seller is the actual titleholder during the real estate transaction. The title is the legal right to modify the property or transfer ownership to another party. For example, the title gives you the right to one day sell the home.
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Legal Process: These two elements are utilized at different times during a real estate transaction. The deed is drawn up by a real estate attorney before the closing meeting for the seller and buyer to sign. The title is researched before closing to ensure no legal or financial problems are associated with the property. The title needs to be clearly stated and researched to guarantee that no legal issues will arise after the transaction.
How To Get A House Deed
If you are involved in any type of real estate exchange or transaction, you will need to make sure that a new property deed is properly recorded. This is a critical step to ensure that the property title is properly conveyed and that your title rights are protected.
Here is a step-by-step guide on how to obtain and record a property deed:
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Obtain A Deed Form
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Legally Describe The Property
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Identify The Parties
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Date & Signature
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File The Deed
1. Obtain A Deed Form
Luckily, deeds rarely have to be created from scratch. Deed forms and templates are widely available. Try your local county recorder office or even an office supply store. You may skip this step entirely if you are working with a real estate attorney who is drawing up the deed for you.
2. Legally Describe The Property
A deed is not valid unless it includes a legal description of the property. This is not as simple as writing down the property’s mailing address. A legal description includes several pieces of identifying information, such as the lot numbers, physical boundaries, and easements.
You can find the property’s legal description by referring to the current or previously-recorded deed or by checking your most recent property tax statement.
3. Identify The Parties
Next, enter the identifying information of the parties involved in the transaction. This is typically the grantor and the grantee. The deed form provides spaces to enter each party’s name. Be careful to use the full name of each party and utilize the correct spelling.
4. Date & Signature
Both parties must sign and date the deed in the presence of a notary public. Otherwise, the deed won’t be valid. Check your local state requirements, as some states require witness signatures as well.
5. File The Deed
Last but certainly not least, you must file the deed at your local county recorder office. Otherwise, the deed will not be considered existent or valid. Be sure to complete any county requirements, such as filling out and including a Preliminary Change of Ownership form. Once your deed is recorded, a certified copy will be sent to you through the mail. The process is now complete, and your deed is viewable by the general public.
How Do House Deed Transfers Work?
House deed transfers are typically conducted at the time of closing and will typically be facilitated by a real estate attorney. The new deed is then filed with the county recorder’s office; this responsibility will be delegated at the time of closing. In some cases, your lender or agent will file the new deed, or your attorney may handle the responsibility. If you ever need to change the name on the deed, like after getting married or divorced, you can file a request with the county.
House deeds can also be transferred between family members following a slightly different process. This may become necessary when switching ownership between relatives or after a family member has passed away. Different types of deeds can be used in these cases, though a quitclaim deed is the most common. When signing a quitclaim deed, you essentially forfeit your ownership of the property to transfer it to another family member. This transfer is then notarized and recorded with the county recorder’s office.
Transferring a house deed can sound complicated, but in traditional real estate transactions, it will happen within the closing process. First-time homebuyers should understand the importance of a title search and what a deed includes. These distinctions will help set you up for your new purchase and ensure there are no legal challenges with ownership.
How To Make Changes To A House Deed
There are certain instances when you need to make changes to a house deed. For instance, you jointly own property with another individual. If this person passes away or you get a divorce from this individual, you will typically need to change your deed. There are also instances when you need to change your deed because you found a typo or clerical error, or you need to refinance your home.
Because deeds are public documents, it is best to present the changes you want to make at your local county recorder’s office. Once the changes are approved, you’ll document these changes. Some options include using a correction deed or recording a new deed. The type of action used is best advised by your county or a real estate attorney for more complex circumstances.
Summary
There are numerous legal components to the home buying process, all of which can be intimidating for first-time buyers. The best advice is to review what you can and work with a trusted agent who will guide you through the rest. There are numerous steps in a typical real estate transaction, and they all end with you signing the final house deed and moving into your new property.
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