What You Need to Know About the Value of Deeds

What You Need to Know About the Value of Deeds

There are many types of deeds transferred when property is sold. Some offer little or no protection for the buyer. Our team, has gathered as much material as possible to help you. We all recognize that some people are unscrupulous and if they can make you feel comfortable by providing a “Deed” that won’t hold up in court they will. Yes it shows you paid money for that piece of paper, but does it show free and clear ownership of the property? If problems arise after the contract is signed the buyer may have serious problems. There are a few terms everyone should understand.

Selling pieces or plots of land with a payment arrangement is good for both parties. The buyers can acquire land they may not otherwise be able to afford, and you maintain a lower tax rating while still making a profit.
The Grantor is the seller and the grantee is the buyer.

Encumbrances can hold many forms of inherited restrictions to the property that won’t prevent selling the title by may decrease the value. For instance, there may be financial, such as liens or non-financial including private restrictions and easement or encroachment as well as air and subsurface issues. There can also be promises (or servitude) agreements, or other security interests but the above problems to not make the title defeasible.

Defeasible (able to be voided) encumbrances include charging orders, building orders and structural changes. Charging and building orders are similar to liens; the prior owner owes money and must pay it by court order prior to any sale of the property and transfer of title. Structural changes are when a building plan has been changed from the approved blueprints.

In deeds there may be monumental loopholes:

• Grant deeds for the sale or transfer of real property

• Warranty deed used in lieu of Grant deeds in some jurisdictions

• Quitclaim deed also used in lieu of Grant deeds in some jurisdictions

• A deeds Poll is not a true deed it is a contract of promise or intent

• A special warranty deed has limited buyer protection

• A bargain and sale deed

• A general warranty deed provides the most protection of all
• And the all-important “bundle of legal rights” are specific legal rights of the holder of the property title

Grant deeds are used in many states to denote property sales or transfers. Both parties need to sign the document in front of a Notary and it must contain the official notary seal. The notary seal only guarantees that the signature is the person who they say they are and that the document is not a forgery.

Grant deed laws vary by state. California does not require the recording of the deed although you (as the grantee) can and probably should request it. However to be valid in some states they must contain the names of both parties, a granting clause (that transfers titles). The property description, and signed by an adult in good mental standing. It must all be in writing and include delivery, execution and acceptance of that transfer and signed.
Warranty deeds add a little extra to the pot, it states the grantor will defend the title if a third party has a claim of any kind. They also say the property is free of any encumbrances the buyer is not aware of and that the property has not been sold to someone else.

Quitclaim deeds are often accepted in lieu of an actual title but only to demonstrate the person signing it has no further financial interest in the property. (Like in a divorce) It offer no warranty, and that the grantor owns the property free and clear, does not declare an absence of encumbrances or guarantee any interest to the grantee. In essence it only says a transaction without recourse or warranties has taken place.

A deeds poll is a legal binding agreement from one individual to another expressing a promise to act or an intention. It offers no protection or guarantees anything.

A special warranty deed offer only two warranties- that the grantor has the title, and that unless written in the contract there were no encumbrances while they owned it. In other word it only warrants the title in regards to any actions or omissions of the grantor at the time you sign.

It’s similar to a special warranty deed. A bargain and sale deed is normally used for foreclosures or tax liens taken over by governments or at auctions. It offers no guarantee regarding encumbrances. It only states that the grantor holds the title. Both the special warranty and the bargain and sale deeds may add specific warranties in writing.

The best protection you can get is with a general warranty deed. There are numerous warranties for the buyer included. They guarantee the grantor owns the property free and clear of encumbrances and that he holds the title and can sell or transfer it. It should include mineral rights, air rights if applicable, easements and any security or public interests.

Last but not least are the legal rights that are transferred with the property.

1. The right of possession meaning he who holds the title is the owner.

2. The right of control of the property within the bounds of the laws.

3. The right of enjoyment stating the owner has the right to enjoy the property within the bounds of the law

4. The right of exclusion meaning no one else can enter or use the property.

5. The right of disposition meaning the new title holder may lease, or transfer or sell at their will.

This is a quick run-down of the most common deeds used in property sales. There are gift deeds, tax deeds and deeds in lieu of debts but it is unlikely you will have to deal with those at all. Just read the entire contract, check for any hint of encumbrances and ask that the sale be signed sealed and recorded in front of you.

If they offer a special warranty deed ask why and be sure it includes the added specifics of why it is a special deed.

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