A deed is a legal document evidencing ownership in real estate, including vacant land, commercial property and residential property. To transfer property to someone else, you must execute a new deed showing the new ownership. A deed of transfer of land must then be recorded in the county where the property is located.
What Is a Deed?
If you own a home or other type of real estate or real property, your proof of ownership is a deed. A deed puts the world on notice that you're the owner of the property. When you sell or otherwise transfer the home to someone else, you'll need to make a new deed showing that you transferred your ownership to the buyer.
Requirements for a Valid Deed
Real estate laws vary from state to state. Generally, however, for a deed to be legally valid, it must contain the following:
- The name of grantor. If you're selling or transferring property, your name must be listed on the deed as the "grantor." If you own the property with someone else and you're both transferring your interests, both names should be listed as grantors.
- The name of the grantee. The buyer's name should be listed as the "grantee." If you're transferring the property to more than one person, each person's name should be listed.
- Words of conveyance. The deed should state that ownership is being transferred between the grantor and the grantee, and it should specify the type of interest being transferred (i.e., fee simple, which is absolute ownership).
- If there are two or more grantees, the deed should specify the form of title, or how they will own the property (i.e., tenants in common or joint tenants with rights of survivorship). Joint tenants have survivorship rights, which means that if one of them dies, the other one automatically gets title to the whole property. Tenants in common do not have survivorship rights, so if you own property 50/50 as tenants in common and your co-owner dies, you still own 50 percent, and the other 50 percent goes to your co-owner's heirs.
- A legal description of the property. The legal description is more than the address; it includes the metes and bounds of the property as described in the public records.
- The signature of the grantor. If you're selling the property and transferring ownership, you sign the deed. The buyer does not sign.
Your state may have more requirements. For example, some states require that deed signatures be witnessed; other states require signature before a notary. Some states require both.
Your county likely has form deeds available on its website or at the county clerk's office; these property deed transfer forms have all the appropriate general language and simply need you to fill in the blanks with the information about your specific transfer.
Types of Deeds
Deeds come in many flavors in most states:
- Warranty deeds.
- Quitclaim deeds.
- Grant deeds.
- Transfer-on-death deeds.
- Trust deeds.
The most common types of deeds, however, are warranty deeds and quitclaim deeds.
What Is a Warranty Deed?
A warranty deed is a deed that transfers ownership, but also promises that the grantor has clear title to the property and is transferring clear title. A warranty deed is a promise that all mortgages, tax liens, judgment liens and other encumbrances have been paid in full, and the grantor is the owner of the property and has the right to transfer it. When you buy a house and attend the closing, for example, the title company will have run a search to see what liens are on the property. The sale proceeds pay all those liens, so that the seller can give a warranty deed to the buyer.
What Is a Quitclaim Deed?
A quitclaim deed is more of a "quick and dirty" approach to land transfers. If you quitclaim property to someone, you're conveying only what you have. You make no warranties about liens or ownership. For example, say you don't own a property at all, but you think you do. You then quitclaim your interest to someone else, so that person is receiving exactly what you own, which is nothing.
As another example, if you own property with mortgages, judgment liens and tax liens on it, a quitclaim deed to another person will give that person the property, but it will come with all the liens attached. If that person later wants to sell the property and pass clear title, those liens will need to be paid.
Recording the Deed
The final step in a deed transfer is recordation. You must take the fully executed deed to the recorder or register of deeds for the county where the property is located; you then pay a recording fee. The recorder will give you the recorded deed for your records, and when anyone else searches for the property's ownership with the recorder, they'll see your deed.
Deed Transfer Costs
Deed transfers are inexpensive. Costs include any amounts paid to buy or download forms or to have an attorney prepare the document. You may also have to pay a notary when you sign it. Once the deed is executed, you need to record it with the county where the land is located. Each county charges recording fees for deeds. The fee schedule should be on your county's website, or you can call the county clerk to find out.
- Make sure you absolutely want to add someone to the deed of your home. If you change your mind, the new owner must consent to being removed from the home. Think carefully about adding someone who has no other legal connection to you (family member, spouse or child). Some homeowners lose the rights to their homes after adding a boyfriend/girlfriend.
Rebecca K. McDowell is an attorney focused on debts and finance. She has a B.A. in English and a J.D. She has written finance and tax articles for Zacks and eHow.