Unlock the Power of eSignature Licitness for Warranty Deed

How to eSign a document: e-signature licitness for Warranty Deed

Hi Lee Phillips here. I want to talk for just a minute about a concept called warranty deeds. Basically you have two types of deeds you have quit claim deeds and you have warranty deeds and we've got another YouTube on quit claim deeds you quit claiming your interest in the property whatever that is you might not even have an interest but you can make out a quit claim deed. On the other hand a warranty deed says that you're gonna make certain promises or the seller is going to make certain promises to the buyer the seller is what we call the grantor the buyer is what we call the grantee. So you're gonna make--if you're the seller you're gonna make certain promises to the buyer. You're going to promise to the buyer or guarantee or warrant to the buyer that you have the actual title to the property it's seasoned in you you have both a equitable title and the legal title you promise or you warrant that you have the right to transfer that or to convey that to the buyer and then you're also going to make some warranties in the future you're gonna promise the buyer the grantee that he has the right to quietly enjoy the property peacefully enjoy it you're gonna give him an assurance that if there is any claim or anybody files a claim against the title or says that they had a title to it that he's going to defend you the seller will defend the buyer in that case he's going to make further assurances that he's going to take proactive steps in order to protect your right to that quiet title or to the peaceful enjoyment of the property. Big deal, huh? Well it is a big deal, If you're the buyer you would like a warranty deed. We don't really worry as much about warranty deeds now as we used to in the past because the guy's warrant his guarantee, his promise is only as deep as the guy is. If he declares bankruptcy the warranty's gone. If he doesn't have any money he's "judgment proof" well how you gonna go back and get a warrant from him or how you gonna get his guarantee how is he going to defend you in court if somebody else makes the claim to the title? What we do now is we get title insurance or we have title searches and we have professional people, companies that go in and they will search the title and they will tell you if there are any outstanding liens or problems associated with the title and then they will sell you an insurance policy it's a big industry and I think my wife is the only one that's ever actually collected on a title insurance policy kind of complex thing but we bought a condo unit and it had been through--the whole complex had been through bankruptcy and blah blah blah couple years after we were actually living in the condo all of a sudden we get a tax bill for a bunch of years back and it was a valid tax bill and the title insurance got to pay our tax bill so we get title insurance now. The warranty deed isn't as important to us because we have a big insurance company standing behind us instead of the warranty the guarantee of the seller He's probably a flake anyway. You do want to keep that title insurance going however. Here's where you're going to want a warranty deed. Lots of real estate investors are putting their investment properties into limited liability companies or S corporations, family limited partnerships, you're probably going to use an LLC and we've got other YouTubes on that sort of stuff but when you transfer that title from you to the LLC or to the corporation or partnership or whatever it is if you use a quit claim deed you are only transferring your interest in that property. You have no warrant going along with the property and basically at that point the title insurance falls off so speak whereas if you use a warranty deed that warranty and the title insurance will transfer over and be available to still cover the title when it goes to the LLC or to the entity that you want to hold that investment property. Now if you're just moving your property back and forth to your living revocable trust your living revocable trust--the one you use for estate planning is just you and that's like moving it from one pocket to the other pocket. You still have the title insurance and everything else you don't need to make warranties to yourself so use a quitclaim deed in that case but remember these entities the LLC corporation partnership whatever it is these entities are not you they are legal entities people that are separate from you so you need to warrant that insurance in that title is a good title and it goes along with it if you use the warranty deed. This is Lee Phillips talking about warranty deeds.