Factors to Consider When Drafting a Property Deed
Deeds document the transfer of real estate ownership from the grantor to the new owner or grantee. The transfer outlined within a deed establishes who holds the title to a property. Noblesville lawyers help people select the right type of deed for their specific real estate transactions.
Different Situations Call for Different Deeds
- Unrelated Parties
Unrelated parties often engage in sales of residential homes. An owner places a property on the market, and someone, usually a stranger to the seller, decides to buy it. The unrelated parties typically complete the transfer with a general warranty deed. This document guarantees the seller has marketable title and able to transfer full ownership to the property to the buyer. Seller is giving the buyer a warranty of ownership and is obligating himself to defend the title if any issues come up for the subsequent buyer. Due to this warranty, many Sellers obtain Title Insurance which protects the seller and buyer from liability for title issues that may be revealed later.
- Related Parties
People who want to transfer property to a relative or add or remove a name on a title will opt for the quitclaim deed. This deed does not guarantee the absence of liens or other encumbrances. A quitclaim deed cannot enable the issuance of title insurance, but this is not typically a priority for property transfers between related individuals. A word of caution on quitclaim deeds – a quitclaim does not even guarantee the personal transferring the property owns the property. A quitclaim deeds simply transfer any interest a person has or may have in the property.
The joint tenants with rights of survivorship deed is another deed type often employed by family members. People living as joint tenants who want his or her share of the property to transfer to the surviving owner. Upon the death of one owner, title to the property automatically vests to the surviving owner.
A transfer on death deed allows an owner to designate beneficiaries on property just like a beneficiary designation on life insurance, bank accounts or retirement accounts. The transfer on death designees do not own the property until the death of the owner. Once the owner passes away, the property by operation of law transfers to the named beneficiaries. The transfer on death deed is an excellent tool for estate planning clients with adult children, as the property will automatically transfer to their children outside of probate.
- Financing Agreements
A deed of trust introduces a third party to the transaction. This deed places the title with a trustee who acts as a third party between seller and buyer. The title remains in the trustee’s name until the buyers pay off the loan needed to obtain the property. If the borrower cannot pay, then the trustee has the right to sell the real estate.
Alternatively, the land contract for deed does not insert a third party between the seller and buyer. This is the deed usually adopted by sellers who are financing their sales. The buyer gets to use the property while paying the seller under the terms of a loan. The seller officially holds the title until the loan is fully satisfied.
Consult a Real Estate Attorney
The Noblesville lawyers at Webster & Garino can advise you about your residential or commercial real estate concerns. We can draft any necessary paperwork, including deeds, to complete a transaction. During real estate litigation, our Carmel Indiana attorney can represent you in court. Contact us today at (317) 565-1818.