No matter which side of the home buying process you’re on, it’s important to understand all the real estate terms and documents you’ll come across.
While you may be familiar with mortgages and contracts, one document that tends to be greeted with uncertainty is the house deed.
What is a house deed? Does it prove that you own your house? This guide will explain what a house deed is, why you may need one, and the role it plays in the home buying and selling process.
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What Is a House Deed and Why Do I Need One?
A house deed, sometimes referred to as a property deed, is a written and signed legal document used to transfer ownership of real property. Real property is land and any property attached directly to it, like a house.
In other words, a house deed is very important to the buying and selling process.
In fact, a home transaction can’t take place without a deed. It’s one of the things you need to buy a house. Both the buyer and seller of a property must sign the document for a transfer of ownership to take place. Every state requires that this be done in front of a notary and, in some states, before other signature witnesses as well.
Is a House Deed Different From a Title?
Though the two terms are often used interchangeably, a house deed and a title are very different.
It’s often assumed that a title refers to a document, but it’s actually more of a concept referring to your legal ownership of a home. A title grants you ownership rights, including possession, control, exclusion, enjoyment, and disposition.
Put simply, a title refers to your ownership of the property, your ability to use your property as you please, to choose who enters your property, to enjoy your property as you see fit, and to decide when and to whom you transfer ownership of your property to.
But because you can’t transfer a concept, a physical document is needed to symbolize and confirm a change in ownership. This is where a house deed comes into play. Closings can take time, but without a deed they can’t happen at all.
What Is On a House Deed?
Deed requirements vary by state. But generally speaking, a house deed should include:
• Description of the attached property.
• Details of the grantors (sellers).
• Details of the grantees (buyers).
Once all parties are in agreement, a deed should also include the signatures of both grantors and grantees. The deed must then be delivered to the grantee by handing the document over and accepted.
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Types of House Deeds
There are different types of house deeds to be aware of. They offer different benefits, and even a few risks, to buyers and sellers.
Here’s what you need to know about the most common types.
General Warranty Deed
A general warranty deed is designed to offer premium protection to the grantee (buyer). This type of deed involves the grantor (seller) making covenants, or a series of legally binding promises, to the grantee.
Such promises could include what’s called the covenant of seisin. This covenant guarantees that the grantor is allowed by law to transfer the property in question. Another is the covenant of quiet enjoyment, which guarantees that the new owner will not be disturbed on their property, even if the grantor had a defective title, such as a previous lien or judgment.
Unlike a general warranty deed, a quitclaim deed is designed to offer maximum protection to the seller.
Also known as a non-warranty deed, this type of deed does not include covenants for the buyer. Should the seller unknowingly have a defective title, the buyer will have no legal recourse should the deed be challenged.
Special Purpose Deeds
Though not as common as a general warranty or quitclaim deeds, there are several types of special purpose deeds you may come across, especially if a seller has someone acting on their behalf.
Similar to quitclaim deeds, there is often little protection for the buyer but in some situations, a special purpose deed is the only legal option. Special purpose deeds include:
• Gift Deed. A gift deed is used to convey a real property title that is given for no consideration, or without money exchanging hands. In some states, there is a time limit to record a gift deed or it becomes void. And despite money not being exchanged, transfer, records, and/or gift taxes are sometimes still required.
• Tax Deed. If a property has fallen to delinquent taxes, a tax deed will be issued for the property transfer.
• Administrator’s Deed. If the seller passes away without a will, an administrator’s deed may be used by the appointed administrator of the estate.
• Executor’s Deed. If a seller passes with a will, an executor’s deed may be used by the estate’s executor to transfer the property.
• Sheriff’s Deed. When property is seized by public office, an execution sale often takes place. A sheriff’s deed is then provided to the winning bidder to complete the transfer.
Obtaining or Transferring a House Deed
As a buyer, you’re not responsible for tracking down a house deed (though it is a critical factor in your house-buying timeline). But if you’re selling or taking out a second mortgage on your home, you’ll have to locate the document before moving forward.
Luckily, you can track down a house deed with just a few simple steps.
1. Determine your jurisdiction. A search for a house deed should always start by confirming your county recorder’s website .
2. Search the database. Once you’ve found the correct database according to the location of your property, search for the record of your house deed. You may need your property index number, but the address of your home may be enough to track it down.
3. Conduct an accuracy check. Assuming you find a record of your house deed, take a few minutes to ensure that it’s accurate. If you do spot an error, call the recorder’s office to determine how the issue can be resolved.
4. Request a copy. If everything with your house deed is accurate, you can request a copy from the recorder. You may need to submit proof of your identity or pay a fee for both the copy and certification. But once you’ve met all the criteria of the office, you’ll have a physical copy of your house deed.
If you’re struggling to track down your house deed, you always have the option of hiring a third party to handle the process for you.
Once you have the deed, you can start the transfer process. Because this is necessary in every home-buying transaction, your real estate agent should be able to walk you through the following steps.
1. Prepare the deed. Even if you’re not using a real estate agent, it’s a good idea to hire a real estate attorney to prepare the deed. An honest mistake on your part could void the transfer or lead to serious legal issues down the road.
2. Review the deed. Both parties should review the deed for any inaccuracies. This includes full legal names, addresses, and the description of property. No one should sign until both parties verify all information.
3. Sign the deed. Both parties need to sign in front of a notary. Check with your state law to see if other witnesses are required .
4. Record the deed. A signed deed should be presented to the local county recorder’s office where it will be filed and stored in their database. Be prepared to pay any associated fees and taxes at this point.
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Knowledge is Power
Though legal requirements can vary, and different house deeds provide unique protections for sellers and buyers, a house deed is generally one of the most important documents to know about in real estate.
If you feel confident in your understanding of the home-buying process and you’re ready to start your journey to home ownership, SoFi offers home mortgage loans with flexible terms, an online application, and mortgage loan officers who are available to guide you through the process. It takes just a few minutes to find out if you pre-qualify. Then you can choose the mortgage that’s right for you and your financial situation.
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