What Is A Real Estate Deed?

What Is A Real Estate Deed?

Recording a deed is the critical, final step in any real estate transaction, yet the process receives little attention because it occurs after closing. In Texas, title companies handle most closings as well as the responsibility for recording (or filing) the deed. Buyers are rarely aware of when, where or why recording occurs. Nevertheless, real estate purchasers and practitioners should be familiar with the basic rules and the protection afforded by the Texas recording statutes.

A real estate deed is a legal and physical document that serves as evidence of the transfer of real property and it outlines the terms and conditions. In short, a Deed is written proof of the transfer of title from the seller to the buyer. The purpose of a deed is to provide evidence of the transfer of legal ownership of real property (real estate) and protect the buyer’s interests.

Parties Involved

Grantor is the party who currently owns the property and is transferring their ownership interest to another party. The grantor is also known as the seller or transferor.

Grantee is the party receiving ownership or an interest in the property. The grantee is also known as the buyer or transferee.

Deeds require the signatures of the grantor(s) and are typically signed in the presence of witnesses and sometimes a notary public at closing. The deed must be delivered to the grantee to be effective.

Types of Deeds

Warranty Deed - provides the highest level of guarantee to the grantee, as the grantor warrants that they have clear title and will defend the title against any claims. In this deed, the grantor states promises to warrant and defend the grantee’s interest in the property, back to the sovereignty of the soil. A grantee who wishes to ensure that the grantor has good title should require this type of deed.

Quitclaim Deed - is one with no guarantees, warranties, or covenants. The grantor does not even claim to own the property. The grantor states, “Whatever interest I have, if any, I do hereby grant and convey.” This type of deed is most often used to clear up a cloud on the title. It is also used to grant an easement.

Special Warranty Deed - the grantor promises to warrant and defend title, but only against claims which may have arisen during his or her period of ownership. Executors or trustees who are transferring title for another often use this type of deed. A grantee can protect his or her ownership interest with this type of deed by purchasing title insurance.

Bargain and Sale Deed - is one with no guarantees or warranties. It is a very basic deed and does nothing to protect the grantee. The grantor implies ownership or the right to transfer title, but does not provide a warranty of title.

Recording

The deed will include a detailed description of the property for identification purposes and is typically recorded in the public records of the county or jurisdiction where the property is located. Recording makes the transfer of ownership a matter of public record, which is important for establishing legal ownership and protecting the interests of both parties. By recording the deed with the local government, the buyer can establish a legal claim to the property and protect themselves against future disputes. Filing a deed in the wrong county has the same effect as not having filed at all.

Title

A title serves as confirmation that the buyer is the rightful owner of the property and that no liens or claims against it are pending that would compromise their ownership rights. To further protect against unforeseen ownership issues, parties involved in a real estate transaction purchase title insurance, which can provide financial protection if there are challenges to the property's title after the sale. A clear title is essential to ensure that a property can be bought, sold, and financed without legal complications.

In summary, a deed is a crucial and legal document used to transfer ownership of real estate from one party to another. The deed is the physical document that formalizes the transfer, and the title is the legal concept that confirms ownership rights and any potential claims or encumbrances on the property.

With the legalities that come with purchasing a home it is important that you work with a title company that is highly versed in real estate transactions and up to date on the entire real estate escrow process. This will ensure a more seamless closing and a much more enjoyable experience when it comes to closing day.

 

Contact Brownstead Real Estate, LLC TODAY for all your real estate needs!

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