Portland Real Estate Deeds and Titles FAQ: 2021
Transferring ownership is at the core of real estate transactions, yet few buyers and sellers truly understand the legal process behind deeds and titles. In this article, we answer some of the most common questions we hear from our real estate clients on this topic.
What’s the difference between the deed and the title?
The big difference between a deed and a title is that the deed is a piece of paper, and the title is an abstract concept: The rights of ownership.
Put another way, the deed is the document that names the legal title-holder of the property.
Why do I have to pay a title fee when I buy a piece of real estate?
In Oregon, as in all US states, a title search is required before a piece of property can be purchased using a mortgage. Lenders want to see a clear line of transfer between previous owners and the current buyers, without “clouds” or “defects”. Here are some possible scenarios that can complicate a title:
- Boundary disputes, for example, the neighbor says their property extends five feet into the property under examination. The properties must be re-surveyed to clearly establish the lines of ownership.
- Easements, or rights of access to the property by a third party. Some transfer with the title, and some do not.
- Liens placed on the title by a previous mortgage company, construction company, or someone else who expects to be paid off before the property changes hands.
- Clerical errors. Simply mis-entering an address or tax lot ID number can cause a title defect to occur.
These are just a few examples, and even when a thorough title search is performed, most lenders still require title insurance. Title fees and even title insurance are a small price to pay for preventing disputes in ownership down the road.
What is all that legal jargon on the deed?
Property deeds that you typically see in residential real estate transactions are known as General Warranty deeds.
A General Warranty deed is a legal instrument with two main purposes: To describe the property being transferred, and to make that transfer from the seller (known as the Grantor) to the buyer (the Grantee).
In the language of the deed, the Grantor states that:
- they legally own the property they are selling and have the legal right to convey (sell) it to a new owner;
- the property is free of liens and encumbrances, outside of any specifically stated in the deed; and
- the title is clear and any further documents that are necessary to prove the title will be provided.
The deed should also state that the Grantee has the legal capacity to receive ownership of the property.
How can I make sure the signing of the deed is valid?
In Oregon, it’s not enough for the buyer to simply sign off on the deed. There are laws around how the deed should be written, how the signing is done and who must be present. Specifically, the Grantor and the Grantee must sign in the presence of a Notary Public. The deed must then be submitted to the County Recorder’s Office.
How can buyers and sellers protect themselves from title errors and improperly transferred titles?
The law can only do so much to ensure that titles are transferred properly from owner to owner using a properly written deed. With all the safeguards, title searches and procedures in place, errors still happen.
Working with an experienced real estate agent is the best way to ensure that the transfer of your property happens smoothly. We closed over a thousand deals with local title companies and know their ins and outs. We believe we work with the best title agents in the Portland area. Contact our top 1% sellers agents today.December 11, 2020