If you have been involved in a real estate transaction, you probably already know "deeds." It is one of the most critical forms when you buy, sell or transfer a property. This excellent BankRate story provides great education on this topic. Some of my take-aways:
- A deed is a document that conveys, or passes, real estate from one party to another.
- What information is included? A deed contains a legal description of the real estate being transferred. The deed must identify who is handing over an interest in the property (the grantor) and who is accepting it (the grantee).
- A warranty deed is used in most sales of property. The warranty deed says that the grantor is the rightful owner and has the right to transfer the title; that there are no outstanding claims on the property from lenders using it as collateral, or from other creditors, and that the property can't be claimed by someone with a better claim to the title. If any of those claims are wrong, the buyer is entitled to compensation. A title insurance policy backs up the claims of the warranty deed, protecting the lender or buyer from disputes about ownership or liens.
- A quitclaim deed is a deed that says, "I'm not warranting what I own, but I'm transferring what I do own to you." With a quitclaim, the grantee has no legal recourse if problems with the title turn up, or if a forgotten lien holder emerges from the woodwork.