28 Jun What Type of Deed is Required to Transfer Real Estate?
A deed is used whenever real estate is purchased, traded, or sold. This document provides information about the property from the time of origination to present. Each time property exchanges hands a new deed must be recorded through the county recorder’s office.
The type of deed required to record property transfers depends on the transaction and property type. Several types of deeds are used, but the most common include : Quitclaim, Deed of Trust, and Deed in Lieu of Foreclosure.
A deed of trust is often used in lieu of mortgage notes. This deed is used to record information about installment loans including the name and contact information for the lender and borrowers, loan terms, and property description.
Lenders can encompass banks, credit unions, hard money lenders, or property owners who engage in owner will carry financing. The lender is listed as the beneficiary on the title and granted authority to repossess real estate if borrowers default on installments. When a deed of trust is used, loan documents are secured with a promissory note and other documents such as a Truth in Lending statement.
Quitclaim deeds are used to add or remove a person or entity to property titles. This type of deed is commonly used to add a spouse after marriage, remove a spouse after death or divorce, and to transfer property gifted through inheritance. Quitclaim deeds are also used to transfer ownership interest. This deed has various uses within each state, so it is best to obtain legal counsel to ensure proper usage.
Deed in lieu of foreclosure is used when mortgage lenders allow borrowers to return their home ‘in lieu’ of being subjected to the foreclosure process. Deed in lieu transfers property interest to the bank and removes borrowers’ names from property titles.