An Overview of North Carolina Property Deeds

north carolina property deed

As you navigate your way through any real estate transaction, you’re likely to encounter a lot of vocabulary terms that are specific to the real estate world. If it’s your first foray into real estate transactions, all of this new jargon can get confusing. 

We find that one of the concepts clients often struggle to understand is property deeds, so we’ve provided an overview of what they are and the different kinds you might commonly encounter in real estate transactions. 

What is a Real Estate Deed?

To understand property deeds, you first need to understand what a property title is. Simply put, a title is the ownership of a piece of property. In real estate, when you own a piece of property you are said to “hold the title” to that property. This gives you the legal rights, control, and responsibility over the property. Real estate titles can be held by individuals, groups of people (ie. couples), or even corporations, organizations, and trusts. Unlike with vehicles, a real estate title is not a physical document; instead, the term is used to describe the concept of the ownership of a piece of property.

On the other hand, a deed is the physical legal document used to legally transfer title from one party to another. The deed states who owns the property, where it is, and what its boundaries are.

During a real estate transaction, a real estate attorney will pull the property deed, among other documents, to conduct a “title search” to make sure there are no liens (a legal claim to a piece of property used as collateral for a debt), unpaid taxes on the property, or other encumbrances that would prevent the seller from being able to legally transfer the title of the property to the buyer. During the sale, the grantor, or person selling or transferring the property, signs the deed over to the grantee, or the person taking possession of the property. In North Carolina, deeds are filed with the county Register of Deeds office. 

Types of Deeds

Several different types of deeds are used during real estate transactions in North Carolina, including:

General Warranty Deed

The deed most commonly used in real estate transactions, a General Warranty Deed is used to protect the buyer in a real estate transaction. With a General Warranty Deed, the seller guarantees to the buyer that the property being transferred has a good, clear title, without encumbrances, and that no third party can make a claim to the property. Through this deed, the buyer agrees to protect the seller during the transaction against encumbrances, or defects, on the title of the property that would have occurred under the ownership of the current seller or any previous owners. This warranty is never implied during a real estate sale and must be expressly stated in a deed. 

Limited Warranty Deed

Also known as Special Warranty Deeds, this type of deed comes with very specific guarantees/warranties that will be spelled out in the deed. Most commonly, the seller will warrant that they have not done anything to cause a defect on the property title since they received it and that they will defend the property against claims based on their actions but not on those prior to the seller taking title. 

  • Trustee’s Deed – This is a form of special warranty deed used when a property has been foreclosed on and the assigned Trustee is able to convey title without title having been transferred into the Trustee’s name.
Quitclaim Deed

Also referred to as a Non-Warranty Deed, a Quitclaim Deed is used when a person is believed to have an interest in a property. Quitclaim Deeds transfer the title of a property from the seller to the buyer without any guarantees that the title is clear of liens or encumbrances and without any protections for the buyer. This kind of deed is often used during non-sale transactions, such as when transferring ownership of property from one spouse to another. It does not provide any warranty or obligation.

  • A note about marital interest – North Carolina is a marital interest state meaning that a spouse has marital interest in a property regardless of whether or not they are on the deed, with exceptions to this rule under very specific circumstances. In this case, a quitclaim deed, with specific language included per North Carolina General Statute, can be used to convey marital interest from one spouse to the other.
Deed in Lieu (of Foreclosure)

In order to avoid foreclosure on a property, the property owner can voluntarily transfer the title over to their lender in what’s known as a Deed in Lieu. This process avoids the hassle of selling the property yourself, however, a deed in lieu and foreclosure usually have very similar impacts on your credit, so it’s important to consider your options very carefully. North Carolina allows lenders to get a deficiency judgment even after accepting a deed in lieu, where the deficiency amount is the difference between the total debt and the current fair market value of the property, unless the mortgage was a seller-financed, purchase money mortgage, or deed of trust.

Contact Starling, Rodriguez & Associates

Whether it’s your first time or you’re a seasoned pro, navigating the world of real estate deeds can get confusing quickly. The real estate team at Starling, Rodriguez & Associates has experience working with a variety of real estate deeds and we can help guide you through the process. Contact our office to schedule a consultation and get your questions answered. 

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