When we meet with new clients we often ask whether they rent or own their home. It seems like a fairly simple question. You either pay rent to a landlord or you have a Deed to the property. However, for some of our clients that distinction is not so clear.
Frequently, our client will say, “I don’t own the home, I am buying it.” Usually, what they mean is that there is a mortgage debt on the property and they are making mortgage payments to a bank or other lender. In their minds, they will not “own” the home until it is fully paid for. This is an understandable and perhaps wise way to look at home ownership. However, it is not quite accurate.
When you acquire the property by Deed, the property is yours. If you are borrowing money from a bank to purchase the property, the bank will usually require you to sign a Promissory Note and a Deed of Trust.
The Deed of Trust gives the bank an interest in your property. You fully own the property, even if you have years of mortgage payments to make. The Deed of Trust gives the bank the right to foreclose on the property and require it be sold if you fail to pay the mortgage payments or fail to comply with other requirements of the Promissory Note.
What you actually own is governed by the language of the Deed conveying the property to you. Each Deed must contain a description of the property. Sometimes that description is short and simple, such as “the house and lot located at 100 Main Street, Asheville, North Carolina.” Other times, the description is lengthy and contains numerous references to compass directions and distances. These more complex descriptions are generally created by lawyers reviewing survey maps. The description should establish the exact location of your property and its boundaries.
A Deed also establishes the type of ownership. For instance, a Deed to you and your spouse creates a type of ownership only available to married people called a Tenancy by the Entirety. The most important aspect of this type of ownership is that one spouse cannot transfer good title to the property without the participation or consent of the other spouse. Also, if one spouse dies, the property automatically becomes the property of the surviving spouse.
A Deed may transfer only a life estate in the property. This means that the recipient of the Deed owns the property during his or her lifetime, but upon death, the property automatically reverts to another.
Transferring real estate can be simple provided you have the assistance of someone with a thorough understanding of the requirements of North Carolina real estate law. Irvine Law Firm offers online Deed preparation to make the process both economical and convenient. Ours is not a fill-in-the blanks, one size fits all solution. We will draft a Deed, based on our email communications with you, that fits your particular needs. With our online services, you can rest assured that the Deed we prepare for you will be compliant with North Carolina law. If we can assist you with preparation of a Deed, contact us by email for a fixed fee quote.