What is a Deed? Using a Deed to Transfer Real Estate
A deed is a legal document used to transfer real estate. While exact form of a deed will depend on the laws of the state where the real estate is located, most deeds share a set of similar characteristics.
Parties to a Deed
There will always be at least two parties to a deed:
- Grantor – The grantor is the person or organization that is transferring the real estate. In most cases, the grantor is the current owner of the real estate.
- Grantee – The grantee is the person or organization that receives the real estate. In a sale of real estate, the buyer is the grantee.
Here are a few guidelines to help keep these parties straight:
- There may be more than one grantor if there is more than one owner. For example, if a husband and wife own real estate together, both of them can sign the same deed to transfer real estate to someone else.
- The grantor can be one of the grantees. If, for example, a father wanted to transfer real estate to himself and his children, the father would be both a grantor (since he is the current owner) and a grantee (since he will still have ownership after the transfer, albeit in a different form with his children).
- Grantors and grantees need not be people. Businesses, trusts, estates, nonprofit organizations, churches, or other organizations can serve as grantor or grantee.
Elements of a Deed
The exact elements of a deed may differ depending on the laws of the state in which the real estate is located. But there are a few common elements that are used in most states:
Grantor’s name and signature
The grantor will typically need to sign the document in front of a notary and have the signature notarized.
Grantee’s name and the manner in which the grantee will take title
The deed must identify who or what organization will receive the real estate.
Note: In many states, there is no requirement that the grantee sign the deed. The grantee will be presumed to have accepted the deed unless circumstances indicate otherwise.
Recitation of consideration
A recitation of consideration is simply a statement that something of value was given in exchange for the real estate. In most states, it is no longer necessary for value to be transferred or for the deed to recite that consideration was paid. Nonetheless, many deeds still have a recitation of value, such as “for and in consideration of the sum of $10.00” or something similar. This is a holdover from an earlier time.
Legal description of the real estate
Of course, it is necessary to identify what real estate is being conveyed. A well-prepared deed will usually contain a surveyor’s description of the real estate or a reference to the subdivision plat or other legal instrument that established the legal description.
This sounds complicated, but in practice it isn’t difficult—you just use the same legal description as the prior deed. The description is usually set off in block text and contains legal language identifying the real estate. That same language can usually be dropped into the new deed.
Language of Conveyance
The deed must make it clear that it is intended to convey the real estate. The exact words may differ from state to state and depending on whether or not the deed is a quitclaim deed or warranty deed. Typical language may include words like assign, transfer, convey, give, or quitclaim.
Statement of Exceptions
Some deeds will list a few exceptions—matters that are not affected by the transfer of real estate. For example, the deed may state that the real estate is “subject to” all governmental right-of-ways on the real estate. These exceptions are really disclosures to protect the grantor from liability.
The date may not be required by law, but it is usually included. The date can be very important for establishing the chain of title.
Acknowledgement by Notary Public
Most deeds must be acknowledged by a notary public.
When the deed is recorded in the land records, the clerk or other official will usually stamp the deed to show when and where it was recorded. This puts third parties on notice that the real estate has been transferred, protecting the grantee from claims against the title to the real estate.