The transfer of property can be done in many ways, with many different documents. Anytime property is transferred the document used must be recorded at the local Register of Deeds office. Below we will go over some of the more common documents; sometimes called instruments.
A warranty deed is the document, or instrument you are most likely familiar with. The majority of transactions finalize with the Warranty Deed being official document. I Warranty Deed, as its name suggest, gives a “warranty or guarantee” to the buyer, also called grantee, from the seller, also called grantor. The warranty states that the seller will warrant and defend the title, meaning they are willing to back up the document, even with a legal process if necessary.
The quitclaim deed is arguably the second most common deed found in a transaction. A quitclaim is similar to a warranty deed with one major difference. I quitclaim gives no warranty or guarantee. Essential you could quitclaim the entire City of Traverse City over to someone without any recourse. As the Quitclaim is stating in layman’s terms… If I own this, I am selling it to you, if I don’t then oh well. Whereas the Warranty deed is stating… I own this, I am selling it to you, I guarantee it.
You might then ask why anyone would want or use a Quitclaim Deed. There are many instances where a quitclaim deed is appropriate. Some examples families transferring properties to a spouse or child. An individual transferring property into their trust, generally instances where a guarantee is not needed. The major benefit to this is transfer taxes. With a warranty deed, transfer taxes must be paid on the value of the property, however with a quitclaim deed they can be exempt.
I Land Contract is a form of seller financing. It is essentially a rent to own agreement. Similar to a standard mortgage, the buyer has a payment plan, along with interest, etc. They is paid on a regular basis to the Seller. Once all payments have been made a Land Contract is then followed by a Warranty Deed.
A mineral deed is just like a warranty deed, accept it only transfers the minerals in the sub surface of a property. A warranty deed can be used transfer both the surface, and mineral rights. But a mineral deed can only be used to transfer the minerals.
These deeds are not as common, however that is generally a good thing. A sheriffs deed is a deed that gives ownership to a property bought at a sheriff sale. The sale is done upon an order from the court. Generally these sales and deeds are used when the property is part of a mortgage foreclosure.
Similar to a Sheriffs Deed a Tax Deed is a special document that grants property to a government body when the property owner does not pay the taxes due on the property.
Lady Bird Deed
The Lady Bird Deed is a fairly common document. A Lady Bird can be looked at as a type of estate planning. In a Lady Bird Deed, the seller transfers property to the buyer, however the ownership doesn’t take place until the death of the seller. This means that the seller still has full rights to the property, including taking out mortgages, agreeing to easements, or even selling it outright. These deeds are usually used for family members to transfer their property to a sibling or child upon their death, without them having to go through the probate process.