Deed is a legal document that serves as proof of ownership for a real estate property. In the context of real estate transactions in the United States, Deed and Title are terms often mentioned.
Let me briefly explain the difference between Deed and Title.
Title represents ownership of a specific property. It is a right, and since it is a right, it cannot be seen or touched. To prove this ownership right, a document is needed, and that document is the "deed."
The Deed is essentially a receipt or document that shows how the owner with the Title holds the property. There are two main types of Deeds: Warranty Deed and Quitclaim Deed. In most real estate transactions, a Warranty Deed is used. A Warranty Deed demonstrates that the owner has the right to sell the property and that there are no encumbrances such as liens on the property.
On the other hand, a Quitclaim Deed is used when a property is being gifted for free. It is important to note that a Quitclaim Deed and a mortgage are separate. If a property is gifted with a Quitclaim Deed while there is still a mortgage on it, the original owner remains obligated to the mortgage. In such cases, it is common to use the more conventional method of a Warranty Deed, taking into account any existing liabilities as part of the purchase cost.
It's important to mention that Quitclaim Deeds are commonly used in situations of free transfers, such as between family members or spouses after marriage.
This is a very brief overview of Deeds, and for more detailed information, it's recommended to consult with a local real estate attorney.
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