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Transferring property ownership requires a deed. A deed is a legal document conveying title from one party to another. The deed must be properly executed, delivered, and recorded to complete the transfer. Understanding deed types and transfer methods helps ensure clean title and avoid future problems.

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How Transfers Work

1

Prepare the deed

New deed drafted with grantor (current owner), grantee (new owner), legal property description, and appropriate deed type.
2

Sign and notarize

Grantor signs before a notary public. Some states require witnesses. Grantee signature not typically required.
3

Deliver to grantee

Physical or constructive delivery to new owner. Deed held “in escrow” isn’t delivered until conditions are met.
4

Record with county

Filed with county recorder’s office. Recording provides public notice and protects against later claims.
An unrecorded deed is still valid between the parties but doesn’t protect against third-party claims. Always record promptly.

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Types of Deeds

Strongest protection for buyer. Grantor guarantees:
  • They own the property and have right to sell
  • No undisclosed liens or encumbrances
  • They’ll defend against all title claims, even from before their ownership
Standard in most sales transactions. Title insurance typically accompanies.
Limited guarantee. Grantor only warrants against claims arising during their ownership period.Common in commercial transactions, foreclosures, and bank sales. Buyer has less protection for issues predating grantor’s ownership.
No warranties whatsoever. Grantor transfers whatever interest they have, which could be nothing.Used for:
  • Transfers between family members
  • Adding/removing spouse from title
  • Clearing title defects
  • Divorce transfers
Not appropriate for sales to strangers.
Implies grantor owns the property but makes no guarantees against encumbrances.Common in tax sales and foreclosures. Less protection than warranty deed.
Names beneficiary who receives property at owner’s death. Avoids probate.Available in about half of states. Owner retains full control during lifetime and can revoke.

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Common Transfer Scenarios

Typically done via quitclaim deed from one spouse to both. No title insurance needed for transfer itself.Watch for: Mortgage implications. Adding someone doesn’t add them to the loan. Lender may have due-on-sale concerns (though usually not enforced for spousal transfers).
Requires quitclaim deed from ex to remaining owner. Usually ordered as part of divorce decree.Watch for: Deed transfer doesn’t remove mortgage obligation. Refinancing typically required to remove ex from loan.
Can be done via gift deed, quitclaim, or warranty deed.Watch for: Gift tax reporting requirements (though usually no tax owed). Child loses stepped-up basis benefit which may pay more capital gains when selling than if they inherited.
Deed from individual to trustee of trust. Typically quitclaim or warranty deed.Watch for: Must be done correctly to fund the trust. Mortgage lenders generally cannot enforce due-on-sale for transfers to living trusts where borrower remains beneficiary.
Deed from individual to LLC entity.Watch for: May trigger due-on-sale clause. Lender approval often needed. Some lenders refuse to lend to LLCs or charge higher rates.

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Recording Requirements

What’s recorded:
  • The deed itself
  • Any supporting documents (affidavits, POA, trust certificates)
Where: County recorder’s office where property is located. Cost: Recording fees vary by county, typically $25 - $100 per document. Some counties charge per page. Timeline: Most counties record within days. Recorded deed returned to grantee or their representative. Why it matters: Recording establishes priority. First to record generally wins against later claims. Unrecorded deeds leave new owners vulnerable.

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Transfer Taxes

Many states and localities charge transfer taxes when property changes hands. Who pays: Varies by location and negotiation. May be buyer, seller, or split. Exemptions: Common exemptions include:
  • Transfers between spouses
  • Divorce-related transfers
  • Transfers to trusts (for same beneficiary)
  • Inheritance
  • Gifts (sometimes)
Amount: Varies widely, from nothing in some states to 2% or more in others. Check local requirements.
Transfer taxes can be substantial. In high-tax jurisdictions, even a family transfer could trigger unexpected costs. Verify exemptions apply before assuming no tax is owed.

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Title Insurance Considerations

When transferring via sale: New owner should get title insurance. Title company issues policy after examining ownership history. When transferring between family: Title insurance optional but recommended if property may be sold later. Some title companies won’t insure property that transferred via quitclaim without full title search. When transferring to trust: Usually no new policy needed if same person is beneficiary. Endorsement to existing policy may be available.

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Common Mistakes

Using quitclaim for a sale leaves buyer unprotected. Using warranty deed when you can’t guarantee clear title creates liability.
All current owners must sign. If married, both spouses may need to sign even if only one is on title (homestead/dower rights vary by state).
Unrecorded deeds don’t protect against later claims. Record promptly.
Transferring title doesn’t transfer or remove mortgage debt. Original borrower remains liable until refinance or payoff.

Next: Divorce and Property

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