A deed, of course,is a legal document representing propertyownership. But you might be wondering if an owner can transfer a deedto anotherperson without a real estate lawyer. The answer is yes. Parties to atransaction are always free to prepare their own deeds. If you do so, be sureyour deed measures up to your state’s legal regulations, to help avert anylegal challenge to the deed later.
Some deeds require more expertise than others. A quitclaimdeed, for example, is far simpler than a warranty deed. Let’s take a closerlook.
Choose Your Deed
When residential properties are sold on the real estatemarket, buyers expect to receive general warranty deeds. The generalwarranty deed promises that no unmentioned lienholders exist who might have claimsto the property; it means the owner is free to sell the home. Warranty deedsare used in “arm’s length” transactions — between people who don’t know eachother apart from the real estate deal.
Further, the general warranty deed is an assurance that theseller will defend the buyer’s title against anyone else’s claim that might arise— even stemming from a time before the seller first took title to thehome. So, before transferring a general warranty deed, the owner has to resolveall mortgages, tax liens, judgment liens and other relevant debts and encumbrances.
If you are transferring property under a generalwarranty or similar deed, it’s wise to seek professional assistance.A lot goes into the assurances of a cloud-free title. Various offices andinsurance policies play their part. In complicated real estate deals, a titlesearch is necessary, andtitleinsurance serves to cover any undiscovered defects.
In contrast, some transfers are simpler and more conduciveto a transfer without a lawyer or real estate agent. When transferring propertyto a family member or into a living trust, for example, or from a company’sowner to the business, a quitclaim can be quickly prepared and will get the jobdone. The quitclaimdeed is also used to take clouds off a title. Ifsomeone could make a claim to the property, that person could sign a quitclaimto confirm they hold no competing claim.
When you use a quitclaim deed to transfer property, you makeno guarantees. Under a quitclaim deed, you transfer whatever interest you hold(if you do, in fact, hold any at all) to the other person. You’re notpromising clear title. You’re not agreeing to protect the recipient fromdefectsin the title that might become problems in the future.
Wills, of course, are another way to transfer a deed, and awill can be written without a lawyer. A will is also a good way to pass a homeon after death, to be sure an heir gets a stepped-up cost basis and receives a breakon capital gains tax. But a will has no effect on deeds if theirtitles are vested in certain ways. Read on to review the ways an owner’s titlecan be vested.
Consider How Your Property Is Vested
While a deed evidences the transfer of property, atitlestateshow the ownership is held. The title sets forth the capacity of an owner to offeran interest in the home as collateral for mortgages, and to transfer the wholeinterest, or a portion of their property interest, to someone else in thefuture.
Title can be held by asole owner.When there are morethan one, the co-owners may have various ways to vest the title:
- Joint tenants with rights of survivorship:Theseco-owners hold equal shares. When one owner passes away, the property interest goesto the surviving co-owner(s). No need for probate.
- Tenants in common:All owners hold theirown percentage of ownership. Percentages can be 50-50, or unequal. Probateapplies, as each owner can leave their part in a will.
- Tenants by entirety:In states thatallow this type of vesting, spouses may be able to keep creditors from placing lienson property for one owner’s debt without the co-owner’s consent.
- Community property:In communityproperty states, spouses own the home 50-50. Each may leave their part in awill. Some states offer community property with survivorship rights, which avoidsprobate.
A title may be in people’s names, or the name of a business.It might also be heldby a trust, to be overseen for specific reasons andgoals.
View AvailableReal Estate Deed Forms
What Are the Steps to Transfer a Deed Yourself?
Quitclaim deeds are cost-effective tools for transferringinterests in real property when there is no need for researched guarantees. Alwaysconsider potential tax implications before you decide to transfer real estate,including tax on thedeed transfer itself. If you decide to proceed with your owntransfer, here are the steps you’ll take.
Step 1. Retrieve your original deed.
If you’ve misplaced your original deed, get a certified copyfrom the recorder of deeds in the county where the property is located. You’llneed to know the full name on the deed, the year the home was last bought, andits address. Expect to pay a fee for a copy of the deed.
Step 2. Get the appropriate deed form.
Be sure to select the form that applies to the county andstate where the property is located. View compliant deed forms here onDeeds.com.
Step 3. Draft the deed.
A valid deed must clearly identify the property. Use theutmost care when including the legaldescription of the property, which sets forth the boundaries, andcan be found on the current deed. Be sure you’ve properly written your name as thegrantor (party who is transferring the property) and the full legal name of thegrantee (new owner). The name of the grantor on your new deed should match thename on the current deed. Identify the address and county of the home, the appraiser’sproperty folio number or parcel ID, and the transfer date.
The correct language, including words of conveyance, mustappear: a statement from the grantor conveying the interest to the grantee, andthe amount of consideration. The consideration is the value exchanged for thedeed. If the grantee pays, the payment amount is included. It’s common practiceis to state the consideration is $1 if you’re transferring but not selling theproperty.
Read, understand, and fill in form carefully,double-checking every completed field on the form. When in doubt about anydetail, check your state’s law.
Step 4. Sign the deed before a notary.
As the grantor, you’ll need to sign the deed with a notarypublic, who will change a small fee. In some states the grantee may not need tosign, but the deed must be delivered to the grantee, and the grantee mustaccept the deed, or it’s not valid. (Yes, your intended recipient canrefusethedeed.)
You can bring the unsigned deed to the recorder’s office ifthe county personnel offer notarization, and witnessing if it is required byyour state. For an example, in Floridaa grantor must sign the deed before a notary and two witnesses — who also sign inthe notary’s presence. As you can see, a state and the counties will havespecific requirements for the deed, which can include formatting, returnaddresses, the name of the deed preparer, and so forth.
Step 5. Record the deed with the county recorder.
The grantee (recipient) is well advised to record the deed inthe county where the property is located. This involves obtaining a PreliminaryChange of Ownership Report, a questionnaire for noting key details of thetransaction.
Step 6. Obtain the new original deed.
As grantor, you keep a certified copy of the newly recordeddeed. The new owner (grantee) should keep the original — and keep it in a safe spot!
What to Look Out For
If unsure about any facet of your decision, speak with an estateattorney, your financial expert, or both before proceeding with your transfer.There are good reasons to have someone with credentials in your corner when youtransfer or receive any type of real estate deed. The risks in propertytransactions evolve, and they are situation-specific. Neither this website orany other should be considered case-specific legal advice.
A few further words to the wise:
- Don’t mess with Medicaid. Federal law and state provisions impose a waiting period after transferring a partial or full interest in the house before you can qualify for Medicaid benefits.
- Divorcing? Who’s paying the loan? If youuse a quitclaim to leave your interest in the house with your ex, remember thelending institution. It still expects you to pay off any mortgage that yousigned or that’s connected with community property.If you are divorcingwith real estate assets, hire an attorney familiar with real estate law as wellas family law.
- Don’t forget to call the insurance company.Quitclaiming your interest can impact the title insurance policy, so check inwith the company when planning your transfer.
- Mind the mortgage! If there’s a mortgageon a home being sold, the seller will have to pay it off, or it needs to beassumable by the recipient. Transferring a home with a mortgage could triggerthe due upon sale provision of the mortgage. Addingsomeone to the deed rather than conveying it outright could be aworkaround, but be mindful of the drawbacks to sharing a title that you’dreally prefer to convey. Another possible workaround is transferring the houseinto a trust. Be clear on what your mortgage company will allow that withoutaccelerating the mortgage due date.
- And look out for quitclaims from strangers. Ifyou receive a home by accepting a quitclaim deed, know that yourtitle could have defects.
At Deeds.com, we take care to provide you with dependabledeed forms. Our formscomply with each jurisdiction’s rules, and have the supplementalparts required by the state or county deed recording office. We monitor our formsto stay up-to-date, conforming with the current laws and rules.
Deeds are powerful. Use them knowledgeably. Be sure you feelsure of the rights and responsibilities you’re conveying, the right procedureto convey them, and the taxconsequences (such as gift taxes and transfer taxes). Read moreabout thefinancial planning aspects of transferring a deed here, andalternatives to transferring a deed.
Photo credit: via Unsplash.