Let’s tackle one of the big questions anyone in the process of homeownership asks: “how a real estate title transfer works?” It’s natural to be a little confused and lost when it comes to the real estate title transfer process – after all, buying a house is a complicated thing!
The real estate title transfer is one of the foundational aspects of the homeownership process. It’s something that every home buyer (especially the new or inexperienced home buyer) should get a handle on before they jump into the process headfirst.
So, for those of you wondering how a real estate title transfer works, here’s our expert guide to the process!
The first thing we should address? What exactly a real estate title transfer is!
When you’re a property owner, the element that shows that you actually have control of it is the title of the property. Holding that legal document in your name proves that you have ownership of the property.
As time goes by, there may come a day when the property owner wants to get rid of his or her stake in that particular property. Once someone shows interest in the property and a sale gets agreed to, the legal process for transferring ownership from one party to another is the real estate title transfer.
That phrase sounds a little complicated – and it can get a bit tricky. Let’s walk through all of the steps that have to take place for a real estate title transfer.
In order to understand real estate title transfers, it’s important to know the types of deeds that are out there. Deeds are the legal documents (usually prepared by real estate attorneys) that detail the ownership of the house or property that one or more parties might be interested in. A real estate title transfer will include a deed transfer of good title between those parties, to transfer real ownership from one party to another.
There are many different types of deeds, including:
- A general warranty deed. This type of deed is the most common type of property deed within the real estate system. In a “general warranty” deed, the owner of one property puts a legal guarantee on the property – assuring the other party that they have the actual right to sell it to them. If some type of situation pops up with the property title later – an unexpected heir, debts, etc. – the general warranty deed usually states that the seller will pay those bills. Most real estate title transfers will come with a general warranty deed.
- A special warranty deed is akin to the general warranty deed – just a little more special. Most of the time, people will encounter a special warranty deed when it comes to purchasing a piece of property from a foreclosure. A special warranty deed provides assurances for the property buyer that only cover a specific time of ownership – just the period that they owned it. Every other time before that is fair game. Acquisition of very solid title insurance might be a helpful bonus when it comes to a special warranty deed.
- A quitclaim deed is another popular type of deed when it comes to the real estate title transfer process. Most of the time, a quitclaim deed comes when transferring property from one family member to another. The reasons for this transfer vary – it could be because of a legal situation between two members of the family, for mortgage reasons, when no money changes hands in the real estate transactions, or even just to fix some problems with language to the title of the property. Quitclaim deeds are one of the more interesting documents in real estate; the name of them describes exactly what they are. One party will literally “quit” their claim on the property. They get used in very specific occasions – only when the two parties are known to each other and are comfortable with each other. The reason for that narrow scope for quitclaim deeds? Since the language in the quitclaim deed is so loose, there are very few legal protections for either the buyer or the seller in the process. Using a quitclaim deed should only be for very specific situations.
So, now for the question of how a real estate title transfer works. The first thing you have to figure out? What type of real estate title transfer is appropriate for your situation. Here’s a quick breakdown of what should work for you:
- For normal buy and sell property and real estate transactions, the most appropriate type of real estate title transfer will be a general warranty deed. Most transactions will feature this specific type of transfer.
- For any foreclosure or “special situation” transfers, a “special warranty deed” will be the type of real estate title transfer needed.
- For transferring ownership between family members or other situations where no money is changing hands, a “quitclaim deed” is needed.
As soon as you determine what type of title transfer is ideal for your specific property transfer, contact your real estate attorney or other real estate professional to get the deed transfer in motion. From there, the real estate professional will draw up the paperwork and bring it to the different parties to get the final signatures. As a final step in the process, the documentation goes to the county recorder for finalization.
“How a real estate title transfer works” is only one of the many big questions that come along with the homeownership process – especially in the title insurance policy area. Still have plenty of questions? LemonBrew is here to help! Visit our special LemonBrew Abstract website to get answers to all of the questions you might have when it comes to the title transfer process or anything else involving title insurance. LemonBrew Abstract provides innovative title and escrow services to make your homeownership title insurance process as easy as possible.
Oh, and if you’re looking for any other guidance when it comes to homeownership, LemonBrew can help there, too! Go ahead and visit our website to get help with anything and everything related to the homeownership transaction – including the real estate title transfer process and much more.
One final note from us here at LemonBrew: if you’re looking for some in-depth articles and information on anything related to the real estate or homeownership process, the LemonBrew real estate blog is where you want to go. There, you’ll discover featured articles and blogs for anyone interested in real estate or buying a new home – including “Process of Building a House: What You Need to Know,” “7 Myths About the Mortgage Loan Process,” “4 Remodeling Projects That Can Increase Your Home’s Value,” and “Title Insurance vs. House Insurance: Do I Need Both?”