Deed: A signed legal document that transfers ownership of property.
Deed: A written document that transfers ownership of property to another person. The document must include a description of the property and name the parties involved. It must also bear the signature of the person granting the property, who must acknowledge before a notary public that the deed has been executed. The transfer is considered complete when the deed is recorded in the office of the county recorder.
Deeds: When to Use a Warranty or a Quitclaim Deed
A deed, a written legal document that states who holds the legal right to property or who transfers ownership of property, must include a legal description of the property, as well as the names of the parties executing the transfer.
When purchasing a home, the deed is held by the bank until the mortgage is paid in full. Once a homeowner has the deed in their possession, they can sell the property, and legally transfer the deed to a new owner.
There are two types of deeds related to property transfers: warranty deeds and quitclaim deeds.
Warranty deeds provide a warranty on the property, which ensures that the property is “good and marketable” and free of defects, liens or third-party claims.
Quitclaim deeds are usually used for real estate transfers. When homes are subject to liens, mortgages, or foreclosure, a quitclaim deed certifies that the current owner has no legal obligation towards to the future owner, or obligation to protect against third-party entanglements. Quitclaim deeds are less safe for homeowners but are usually less expensive.
According to Steve Tytler, owner of Best Mortgage Inc. in Washington, “Many people don’t realize that you don’t have to actually own a property in order to file a quitclaim deed on it. That’s because all that a quitclaim deed says is that you quit, or give up, any legal ownership interest that you have in a certain property — even if you never had an ownership interest in it to begin with.”
Most often a quitclaim deed is used when a property is being simply transferred not sold to someone else.
“Parents may quitclaim a property to their children when they move to an assisted living center, or for various financial reasons. A married co-owner may quitclaim his or her share of the property to the other co-owner during their divorce. Or, a sole owner can create co-ownership with someone else by using a quitclaim deed, perhaps after marriage in order to establish co-ownership of the home. An owner might also quitclaim title to the property into a revocable living trust, for estate-planning reasons,” real estate attorney Brian Farkas says.