Chapter 5: Transfer of Title to
Real Property
© Dearborn Real Estate Education, 2012
Methods of Transferring Title
• Title: the right to and the evidence
of ownership of real estate
– Represents the bundle of legal rights
• Deed: evidence of title
© Dearborn Real Estate Education, 2012
Methods of Transferring Title
• Voluntary alienation
– By sale or gift
• Involuntary alienation
– By operation of law
© Dearborn Real Estate Education, 2012
Essential Elements for a Valid Deed
• Must be in writing
• Legal capacity of the grantor
• Grantor and grantee must be identified
• Adequate words of conveyance
• Accurate legal description of property
• Signed by grantors
• Must be delivered and voluntarily accepted
© Dearborn Real Estate Education, 2012
Non--Essential Elements for a Valid Deed
Non
• Do not have to…
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Be witnessed
Be dated
State amount of consideration
Acknowledge (notarize)
Record!
Sign under seal
© Dearborn Real Estate Education, 2012
Types of Deeds
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General Warranty
Special Warranty
Bargain and Sale
Quitclaim
Special Purpose
© Dearborn Real Estate Education, 2012
General Warranty Deed
• Covenant of seisin
• Covenant against encumbrances
• Covenant of quiet enjoyment
• Covenant of warranty forever
© Dearborn Real Estate Education, 2012
Special Warranty Deed
• Warranty that grantor received title
• Warranty that property was not
encumbered by grantor
© Dearborn Real Estate Education, 2012
Bargain and Sale Deed
• No express warranties against
encumbrances
• Does imply that seller holds title and
possession
• Very similar to quit claim deed
© Dearborn Real Estate Education, 2012
Quitclaim Deed
• Non-warranty deed
• No express or implied covenants or
warranties
• Used primarily to convey less than fee
simple or to cure a title defect
© Dearborn Real Estate Education, 2012
Special--Purpose Deeds
Special
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Correction deed
Deed of gift
Deed of release
Deed in lieu of foreclosure
Trustee’s deed
Timber or mineral deed
Deeds executed pursuant to
court order
© Dearborn Real Estate Education, 2012
Excise Tax (aka Revenue Stamps)
• Paid by sellers in most real estate transfers
• Also called deed transfer tax or revenue
stamps
• Rate is $1 per $500 of consideration or
portion thereof
• Calculated on full purchase price
• Always a whole dollar amount
*Round up to the next 500; divide by 500*
© Dearborn Real Estate Education, 2012
Involuntary Alienation
• Escheat
• Eminent domain
– The right of the government to take
private land for public good
– Condemnation is the process
– Just compensation must be given
– Taking of leased property
terminates the lease
© Dearborn Real Estate Education, 2012
Involuntary Alienation
• Lien foreclosure
• Adverse possession
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Open
Continuous
Exclusive
Actual
Notorious
© Dearborn Real Estate Education, 2012
Transfer of a Deceased Person’
Person’s Property
• By descent (intestate succession)
• Transfer of title by will
© Dearborn Real Estate Education, 2012
Title Assurance
Five criteria for marketable title:
1. Free of significant liens and
encumbrances
2. No serious defect
3. No questions of law or fact that
question its validity
4. Promise of quiet enjoyment to grantee
5. Be reasonably assured of fair market
value
© Dearborn Real Estate Education, 2012
Title Assurance
• Title Search
– Marketable Title Act
• Title Insurance
• Title Recordation
– Necessity for recording
– Conner Act
© Dearborn Real Estate Education, 2012