What is a Deed?
A Deed is a document that transfers an interest in real estate. It contains the names of the current owners and the names of the buyers, as well as how the buyers will own the property. It is recorded at the Register of Deeds in the county where the real estate is located based on the legal description of the property, which is different from the street address. It should be recorded immediately after the property is sold or given as a gift. Upon recording, it provides notice to all future owners of the ownership of that particular real estate.
Different types of deeds are: warranty, which guarantees the ownership interest in the property; quit claim, which transfers only what the seller has without any guarantees as to ownership; personal representative’s deed, which transfers property from a probate estate; guardianship deed, which transfers property from a guardianship; trustee’s deed, which transfers property from a trust; condominium deed, which transfers ownership in a condominium.
What is an Offer to Purchase?
An Offer to Purchase is a document whereby a prospective buyer makes a formal Offer to Purchase real estate from the current owner. It will contain all of the provisions of the sale, including price and closing date. Frequently, it contains contingencies such as obtaining financing, appraisals or inspections which must be completed before the buyer is obligated to complete the transaction. It is the buyer’s Offer to Purchase and should be completed by the buyer and given to the seller to review and accept or counter offer. Upon acceptance by the seller, or acceptance of the counter offer by the buyer, it becomes a legally enforceable contract if properly drafted. Both buyer and seller should protect themselves by having it either drafted or reviewed prior to being signed.
What is Title Insurance?
Title Insurance is an insurance policy issued by title insurance companies which guarantees the ownership interest of real estate subject to any exceptions listed in the policy. It is usually paid for by the seller. The cost is determined by the amount of the sale price. The title insurance company will have an examiner inspect the public records with regard to the property and note any deficiencies in the ownership, such as outstanding mortgages, easements, judgments, tax liens and mechanic liens, and list them in the policy as exceptions. The buyer and the buyer’s mortgage holder will want the seller to correct any such exceptions prior to or as part of closing the transaction. If the title insurance company misses a defect in its examination, it is responsible for resolving that defect. If there is a mortgage on the property, the buyer will be responsible for a title insurance rider to protect the mortgage holder from any defects. The cost of the buyer’s policy is substantially less than the one provided by the seller.