Understanding how deeds work is vitally important for every real estate investor. There are several different kinds of deeds, and the type you get when you buy a property may affect whether you have recourse if there are any future claims. A clause in the deed may also limit what you can do with your property or require you to allow other property owners to cross your property to access theirs.
What Is a Deed?
A deed is a legal document that shows proof of ownership for a property. It contains information about the current owner, the person or entity that sold it, a physical description of the property, and other important information.
When you buy a property, the deed will state who the grantor is, which is the person or entity that is selling the property. The deed will also state who the grantee is, which is the person or entity that is buying or taking claim of the property.
There are several types of deeds, and the one used may affect how much protection you will receive when buying a property. The deed may also contain legally binding guarantees or restrictions on how the property can be used.
Difference Between Deed and Title
A deed and a title are not the same. A title gives a property owner the legal right to reside on and modify a property. The deed transfers ownership of a property from one owner to another.
Another way to view the difference between deed and title is in how the two terms are sometimes used. Someone may say “he deeded the property to me,” for example, to describe the process of transferring ownership. Someone may also say “I have the title to this land” to refer to owning a property.
Types of Deeds
There are several different types of deeds, and the one you receive will depend on how the property was purchased. Different types of deeds each have important stipulations that may affect how a property can be used.
Quitclaim deed
A quitclaim deed is used when ownership of a property is transferred to…