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SmartAsset: What Is a House Deed?

Anyone buying a house for the first time has to become familiar with various real estate terms. For example, you’ll need to understand the difference between being pre-qualified and preapproved for a mortgage. You’ll also need to understand how house deeds work. Read on as we explain what a house deed is and why you’ll need one in order to close on a house. Consider working with a financial advisor as you consider whether to rent, buy or sell a residence.

House Deeds: The Basics

A house deed is a written document that shows who owns a particular property. When someone is ready to buy a house, the buyer and seller must sign a deed in order to transfer the property’s ownership rights to the new homeowner.

A deed is an important legal tool. Many ownership disputes are settled by simply checking the name on the deed. Since deeds become public records in most states, failing to record a deed may create problems. For example, an unrecorded deed may become an issue for heirs once the original owner dies.

How a House Deed Differs From a Title

What Is a House Deed?

Since deeds and titles are related concepts, they’re often mixed up. The title refers to the legal right to access a property and transfer its ownership interest to another party. You can have either a full or partial interest in a property. But you can never transfer more than you actually own to another person.

A house deed, on the other hand, provides proof of property ownership. In most states, property deeds need to be filed and notarized. And in some cases, an impartial witness needs to be present who can confirm that a deed has been signed.

What a House Deed Includes

Different states have various guidelines regarding the kind of information that a house deed should include. But generally, a deed should provide a detailed description of the property and information about its former owners (referred to as the grantors) and the new owner (referred to as the grantee). It must also include their signatures.

In addition to identifying the property’s current and future owners, a house deed must include certain language permitting the legal transfer of a property to take place. A deed cannot take effect until someone legally delivers it to the new property owner. This means that the former owner must do something to indicate that he wants to make the new deed effective (like handing over the deed or simply pointing to it).

Types of Deeds

SmartAsset: What Is a House Deed?

Deeds fall under two broad categories: official deeds and private deeds. In most cases, property transfers involve the use of private deeds. Official deeds are used in connection with court rulings.

Deeds may also vary in terms of the type of protection they provide property owners. Quitclaim deeds, for example, offer no extra protections to grantees. If there’s an issue with a property’s title, the new owner can’t use the deed to take legal action against the former owner.

General warranty deeds include promises that provide homeowners with the most support and make the former owners responsible for defective titles and other ownership issues. But under special warranty deeds, grantors are only liable for problems that appeared when they owned the property.

There are also special purpose deeds used for official (or legal) purposes. For example, a tax deed gives the government permission to sell a home or another property in order to collect unpaid property taxes.

Bottom Line

House deeds are documents that identify the property owners and their rights. If you’re buying a house, it’s best to consult a real estate attorney if you have questions about the protections and warranties included in your deed.

Tips on Real Estate

  • A financial advisor can help you understand how it will impact your budget and financial plan. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Our affordability tool will help you determine exactly how much house you can afford.

Photo credit: ©, © Mitchell, ©

Liz Smith Liz Smith is a graduate of New York University and has been passionate about helping people make better financial decisions since her college days. Liz has been writing for SmartAsset for more than four years. Her areas of expertise include retirement, credit cards and savings. She also focuses on all money issues for millennials. Liz's articles have been featured across the web, including on AOL Finance, Business Insider and WNBC. The biggest personal finance mistake she sees people making: not contributing to retirement early in their careers.
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