RESIDENTIAL REAL ESTATE CONTRACTS: SECTION 10
This is a brief summary of real estate contracts. This summary does not cover all aspects of the contract. This video has been made specifically for Real Estate Agents to use as an unofficial educational resource. Nothing in this video is intended to convey legal advice or best practices in any field. This video is only intended to give general advice on broad topics relating to contracts and the closing process at large. For legal advice please contact an attorney and for lending advice please contact a lender.
10. CONVEYANCE
What we’ll be talking about most in this section is the type of deed. The contract mentions a general warranty deed, but at closing many people mention that they want it to be a survivorship deed. They’re actually the same thing.
Warranty deed: The seller states that they hold clear title — they had good title when they bought it, they are now giving good title to the purchaser, and, if any issues come up and anyone comes out of the woodwork with claims, the seller is warranting that they will defend it. What would really happen in this case is that we would make a claim against the title insurance and the insurance company would take over to protect the purchaser, but the warranty deed is an extra layer.
Survivorship deed: A type of warranty deed. This states that if one of the buyers dies after getting this warranty from the sellers, the other buyer will automatically take the entire title. It won’t go to their estate, to their children, or to anyone else. It is an internal deal between only those on the deed — last one standing gets it all. Sometimes there will be a situation where you have a married couple purchasing a property and a parent is also part of the deed and is providing financing. In this case we have to ask if everyone on the deed, including the parent, wants to be part of the survivorship deed, and the parent will usually ask to be included so that if they die the property will go directly to the couple and not to the parent’s spouse or any other children they may have.
TIP: Survivorship defaults for a married couple but not for an unmarried couple. If an unmarried couple purchasing a house together would like a survivorship deed it needs to be explicitly requested.
Other terms you may hear regarding deeds are statutory deed, special deed, special warranty, and quitclaim. Quitclaims are the ones we use most when it comes to quickly transferring deeds because no one is warranting anything. A quitclaim deed transfers all of the seller’s interest in a property to the buyer. This often occurs in situations with multiple heirs who want to transfer the deed to just one sibling; no warranties are needed, they’re just transferring all ownership to one person.
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[INSERT SAMPLE REAL ESTATE CONTRACT HIGHLIGHTED AND CORRESPONDING NOTES SHEET SIDE BY SIDE]
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