The deed is the heart of the real estate transaction. Once the previous owner has signed over the deed to the buyer, the real estate outlined in the deed belongs to that buyer. The deed represents the new owner's legal claim to the property.
Deeds Explained
A deed is a written contract between two parties who agree to transfer land from one to the other. A real estate deed is broken up into several parts. The Premises opens the document with the basic details of the property and the parties exchanging the property. The Habendum and Tenendum confirm the transfer of the estate.
The Redendum is the part of the deed in which the grantor may retain something from the transferred property. The next parts of the deed are the necessary conditions, followed by the warranty and covenants. In the warranty, the grantor warrants the grantee the title. The covenants are a series of promises made by the grantor to the grantee. Finally, the last part of the deed is the conclusion.
Valid Deeds
A deed must be on paper in order to be valid. All terms of the deed must be clear. In addition, the grantee must be legally able to receive the property. The deed must contain the seal of a notary public and be accepted by the grantee that receives it.
Types of Deeds
In most cases of real estate transfer, a general warranty deed will be required. Another type of deed is quitclaim deed, in which a grantor relinquishes any possible property claim to the grantee, even when the grantor has no established right to said property.
A special warranty deed may be used if there are some exceptions to the typical warranty agreement. These are more often in transfer of commercial real estate. You can use a bargain and sale deed to grant title without the grantor making warranties against encumbrances such as a mortgage or lien on the property.
Creating a Deed
Your real estate broker will help create the deed. Both buyer and seller should read the deed thoroughly before signing and be sure to ask questions of the broker about any aspects of the deed that may be unclear. This will help prevent any legal issues with the deed cropping up after transferring the title.
