A deed for real estate is a legal document that transfers ownership of real estate from one owner to another. When buying and selling real estate, in the state of Illinois, there are several different types of deeds that are used. If you are selling or buying real estate it is imperative that the correct deed is used in your particular situation because the last thing you want is a costly legal battle over a wrong deed.
In my practice the most commonly used deeds are the warranty deed, quitclaim deed, and contract for deed.
A warranty deed transfers title ownership from a seller to a buyer and contains a guarantee that the seller owned the property and is transferring it to the buyer free of any encumbrances. What does that mean? Basically, it means you own the property, have the right to sell the property, and nobody else has any ownership interest or potential ownership interest. When is a warranty deed used? A warranty deed is used between unrelated parties because it offers the most protection for the buyer. A standard real estate transaction will be done with a warranty deed.
The second most popular deed that I use in my law practice is the quitclaim deed. A quitclaim deed offers less protection to the buyer than a warranty deed. It is typically used when property is transferred for no value rather than sold. The most common use for the quitclaim deed is when we are drafting your estate plan and we transfer the ownership of your home or investment property into your trust. This is the most advantageous way for your loved ones for you to plan for the transfer of real estate after your death.
The third most popular deed used in my law practice is the contract for deed. A contract for deed is a common option for seller-financed sales. For example, if you are selling your house and you find a buyer who doesn’t qualify for mortgage financing, you may consider conducting a private sale that you finance to the buyer until he or she can qualify for a traditional mortgage. The terms of the contract will all be negotiated beforehand, but once agreed upon, the buyer takes possession of the property and makes regular loan payments to the seller. Once the loan is paid in full, the full title and ownership are then transferred to the new buyer with a warranty deed.
As you can see, the deed is one of the most important documents in the real estate legal industry. Although you may be able to spend money online and find a deed to fill out, as with any specialty legal situation, what is your peace of mind worth knowing it was done correctly?