Guarantor: A Guide To Understanding

Legal documents are famously drenched in confusing jargon. It is not uncommon for some of the lingo to be puzzlingly similar. Guarantee, guaranty, guarantor come to mind. What is the difference between these words? How to do they affect the legality of my document? Consider this article your comprehensive guide to all the iterations of the legal term guaranty.

What is Guaranty?

Legally speaking, a guaranty is a formal agreement between two parties used when money or services has exchanged hands. A guaranty is a contract outlining a promise from one party to either pay a debt or perform a service or duty as promised. Specifically, a guaranty is a promise to fulfill the duties of another in the event that fail to do so.

A guaranty is often drafted after several attempts have been made to receive outstanding payments or services.

When Would I Use a Guaranty?

To reiterate, a guaranty is often a promise to execute the unfulfilled duties of another party. The most common example of this is when someone cosigns for something. For example, if a student is applying for a loan for college tuition. They will likely need a parent or guardian to cosign it for them. Additionally, when someone buys a car, rents an apartment, or opens a credit card, they may be required to have someone cosign for them.

Someone may need a co-signer in the following instances:

They have a poor credit score (or they don’t have any credit at all)
Not meeting a minimum income requirement
Having a poor debt-to-income ratio (i.e. they are making less money than they currently owe already)
They are self-employed and/or have an irregular stream of income
Being between jobs or unemployed

Whoever cosigns a transaction will sign a guaranty that they will take over the financial responsibility promised in the event that the primary can no longer do so.

Things to Consider before Cosigning

It is important to understand the financial risks involved with cosigning on a loan. Below are some things to consider before you cosign.

Why they Need a Co-signer

When someone asks you to cosign a loan, it is because they do not qualify by themselves. Sometimes, this could just be because your child does not have a credit history yet. Therefore, you can help them start one and set them up for future financial success. On the other hand, if an older friend or relative seeks you out as a co-signer, be sure to do your due diligence. Do they make enough money to cover the payments themselves? Are they trustworthy enough to make the payments? Do they put more money on a credit card than towards paying off debts? The bank or lending institution is requiring a co-signer because they do not trust the client has the ability to pay on their own.

No Personal Benefit

Whatever you are cosigning on is often of no benefit to you personally. The primary party will live in the apartment, buy groceries with the credit card, or drive the vehicle they are buying. The primary benefit to you would be the satisfaction that you are helping someone you love. Which is a great reason! Just keep in mind what is at stake for you, financially speaking.

Co-signing Affects Your Credit Score

In the eyes of a bank, a co-signer is just as responsible for payments on a loan as the primary account holder. Meaning, if the principal is late on a payment, it is reported on their credit score and yours. Worse still, it may take several months before you are aware of the late or missed payments. Therefore adding up negative credit information in your name, without you even knowing it. Be sure you keep in contact with the principal on the loan to check in on their payments.

Conversely, cosigning a loan can actually improve your credit score. If the principal makes all of their payments in full and on time, this will positively affect both of your credit scores. Depending on the length of the loan period, this is still a risky investment – especially if you already have great credit.

You May Go Into Debt

We mentioned the debt-to-income ratio earlier in this article. Specifically, in reference to someone having trouble getting a loan alone if they have a poor debt-to-income ratio. Well, when you cosign a loan you are taking responsibility for the debt of the principal signer. For example, let’s say your cousin owes $27,000 on a car purchase that you cosigned. Now, in the eyes of credit standings, it now looks like you have a debt of $27,000. If your income is substantially more than that, your debt-to-income radio will likely be fine. However, if the ratio is too high, you may have trouble taking out your own loans.

You May Have to Take Over the Payments

The very foundation of a co-signer is that they take financial responsibility for the loan if the principal defaults. Translation: if they cannot pay, you have to. As previously mentioned, you may not be aware of late or missed payments until months later. When that happens, debt collectors may target you and even sue you for the outstanding payments. Worse yet, you can have a judgment entered against you. A judgment is bad credit juju, and one of the worst things for your financial health.

Furthermore, let’s say the principal files for bankruptcy. They will get the shared debt discharged from their financial ledger. You, however, will be solely in charge of paying the debt and maybe even forced into bankruptcy of your own.

Relationship Strain

It should go without saying that money is one of the leading causes of relationship trouble. Cosigning on a loan is a big commitment, that often lasts for years to come. In the event that the principal defaults on the payments and ruins your credit, how would you feel? Would your relationship be adversely affected? What if you grow apart before the terms of the loan are met? Be sure to consider the potential strain this type of arrangement could put on your relationship.

Backing Out is Not Easy

Once you have decided to cosign a loan, it is quite difficult to make out should you change your mind. First of all, the principal would have to close the account and re-apply as a single entity. However, their financial situation would need to drastically improve for them to qualify on their own.

Backing out is not impossible, it is just complicated. Truly understand that when you cosign a loan, you are most likely in it until the loan is paid back in full.

Guaranty vs. Guarantee

In the eyes of the law, guaranty and guarantee can sometimes mean the same thing. Both are detailing a promise made to another party. Essentially, the primary difference lies within the intended grammatical use. For example, guaranty, as detailed in the section above, is only used as a noun. Guarantee, on the other hand, can be used as either a verb or a noun.

Guarantee Definition

Let’s dive deeper into the grammatical variations of guarantee.

When used as a verb, guarantee can mean:

Affirming that a promise made will, in fact, be kept. The client guarantees payment by October 1st of this year.
Agreeing to absorb unpaid debts or obligations on someone else’s behalf. My mother guaranteed my apartment lease. (i.e. The mother would cover the rent if their child could not make defaulted on payments)
Stating something with extreme confidence. I guarantee you will love this restaurant.

Conversely, guarantee can also be used as a noun. Defined as:

A promise that a service will be provided, debt will be paid, or a condition will be met. I submitted a written guarantee to my bank ensuring my debts will be paid in a timely manner.

Guarantor Definition

A guarantor is a person who takes responsibility for someone else’s debt in the event that they cannot pay. For example, a co-signer on a mortgage would be considered a guarantor. Not only does a guarantor take financial responsibility of a loan, but they use their own personal assets as collateral. However, the guarantor has no legal claim to the asset acquired by the principal within the loan terms.

A guarantor can also be responsible for verifying someone’s identity. For example, when someone is applying for a passport.

Who Can be A Guarantor?

First of all, a guarantor must be a legal resident of the country where the loan is taking place. Furthermore, one must be 18 years or older with a history of good credit to qualify. When applying for a loan, a guarantor must prove they have sufficient income to cover the payments if the principal defaults.

Interestingly enough, a principal applying for a loan can sometimes act as their own guarantor. When this happens, the principal will put up an asset of their own as collateral. For example, a principal may offer their car as collateral in a loan agreement. This means that if they cannot keep up with their payments, the lender can seize the car and sell it to cover the debt owed.

Guarantor vs. Co-signer

To clarify, a guarantor is not the same thing as a co-signer. When someone co-signs for something, they will legally own said asset. On the other hand, a guarantor has no legal rights to the asset acquired. A guarantor simply promises to take over payments in the event the principal fails to pay.

It is usually at the discretion of the lender to choose whether to request a guarantor or a co-signer. A co-signer is preferred if the borrower’s income falls short of the requirement set by the lender. In this case, a co-signers income with likely make the borrower meet, or exceed, the requirement. A guarantor, on the other hand, may have satisfactory income but a mediocre credit score.

Should I Use a Notary?

As with any important document, you should use a notary. A notary is an official representative of the secretary of state. The primary role of a notary is to prevent fraudulent signatures on documents of great importance. This process is referred to as a notarization.

In terms of guarantees, loans, and any other document regarding financial commitments, it is always a good idea to get the relevant documents notarized. There have been a number of cases where a principal has forged someone’s signature as a guarantor or co-signer. If and when they default on the loan, the person whose signature they forged could face some rather unexpected and nasty debts. Furthermore, that person’s credit score will likely be ruined. Proper notarizations help protect your delicate financial health, as well as your assets.

What Happens During a Notarization?

Notary laws and regulations vary from state to state. However, notarizations go something like this…

Identification – The cornerstone of a successful notarization is the proper identification of all parties signing the document. This is done with the aid of valid a valid form of photo identification, such as a drivers license or passport
Consent – A thorough identification involves more than checking i.ds. In fact, a notary will go one step further and confirm that the signing party is volunteering to sign at their own free will. Furthermore, the notary will ask the signer if they understand the document in its entirety
Oath or Affirmation – Certain types of documents call for a jurat notarization. The distinctive element of a jurat is the requirement for the signer to verbally accept an oath or affirmation. An oath, as you are probably familiar, is a promise made before God. In the case a jurat, the signer is promising that the contents are true and complete. An affirmation carries the same weight but promises truth on the signer’s honor instead of to a higher power
Sign and Stamp – Finally, all required parties and the notary themselves will sign the document. Then, the notary will use their unique notary seal (stamp) to complete the notarization

Notary vs. Attorney

Let’s take a step back to number two in the last section, “consent”. Here, we detail that a notary ensures each signing party understands the document they are signing. It is vital to note that it is not the role of a notary to answer questions if the signer doesn’t understand something within the document. In fact, a notary cannot legally act as an attorney regarding a document they are notarizing.

Therefore, if you have any lingering questions about the document, consult a lawyer before getting the document notarized. This is especially important regarding documents involving finances.

What to Bring to a Notary Appointment

Congratulations! You have consulted your lawyer and you have the final draft of your document. Now what? Here is a list of everything you need to bring with you to your appointment.

Proper Photo Identification

As previously mentioned, accurate confirmation identity is vital to a proper notarization. Essential elements of an acceptable form of ID include:

A recent, distinguishable photo
The issuing authority (i.e. Texas if you have a Texas drivers license)
An accurate physical description (eye/hair color, height, etc.)
Your signature

Commonly accepted forms of identification include:

A valid passport
State-issued driver’s license or identification card
Green card (resident alien identification card)
Military identification card

Conversely, unacceptable forms of identification include:

Social security cards
birth certificates (long form or short form)
School or university ID cards
Credit or debit cards (even ones with photos on them)

Please note that acceptable forms of identification can vary by state.

Signer(s) of the Document

More often than not, documents will require the signature of more than one person. If that is the case, you can save time and money by bringing all involved parties to the same notary appointment.

What if the necessary parties all live in different states? Or perhaps your schedules simply cannot sync up to attend the same appointment. Fortunately, you can have multiple notarizations on the same document. In fact, different notaries can even perform each signature’s notarization. However, this adds considerable time and expense to the notarization process. Furthermore, it is vital that the same original copy makes the rounds for the necessary signatures. Should any amendments be made along the way, a new notarization would be required to ensure every signing party saw and accepted the changes.

The Document

Just a friendly reminder to bring the document itself! This may seem obvious, but we have all locked our selves out of our houses when forgetting something as obvious as our keys.

You can save time at the appointment by filling out any necessary fields prior to your notary appointment. However, save the fun of signing until you are in the presence of the notary. Signing in front of the notary is not always legally mandatory. However, it is a good idea to do it anyway, just in case.

Notary Fee

While some places offer complimentary notary services, you will more than likely have to pay a fee. Notary fees vary based on a variety of factors, such as:

Type of document
State of signing
Number of signatures
Additional fee options (such as travel for mobile notaries)

Typically, a notary will charge on a per-signature basis. Most states have a legal cap that a notary can charge. For example, in California, the max allowable notary charge is $10 per signature.

Where to Locate a Notary

Now that you know what to expect during a notarization, where can you get one done? Fortunately, you should have to look far to find a notary near you. There are approximately four million notaries in the United States alone. Naturally, rates and availability will vary depending on where you live. When beginning your local search, here are some good places to look:

Banks or Credit Unions – Almost everyone out there has a bank account. If you are one of those people, your bank may offer complimentary notary services for account holders
The Public Library – That’s right, your local library holds more than stories. Many libraries have a low-cost notary available for public use
Hotels – A convenient option for frequent travelers, many hotels offer a notary service. Conversely, if they do not, the concierge can likely point you in the direction of one
Police Stations – A handful of police departments offer notary services
AAA Branches – AAA does more than fix your flat tires! Some local offices provide notary services
Insurance Agencies – Check with your insurance provider about their notary services
Local Government Offices – Check with your local town or city hall or county clerk’s offices about their notary services
Universities – Many campuses provide notary services to students and faculty
Mobile notaries – The ultimate in luxury notary services – have the notary come to YOU! Why race around town when you can have notary services brought right to your doorstep. This option is more commonly available in larger metropolitan areas

Bear in mind that notaries are public servants. Therefore, even if you are not a client/customer/account-holder at any of the above establishments, they can not deny you of notary services if they offer them.

Guaranty: In Summary

With any matters dealing with finances, extra care and consideration should always be given. If you are asked to guaranty or co-sign a loan, understand the risks involved. Consider the proposition from all angles, and make sure you have a solid, trusting relationship with the principal of the loan. A guaranty is a legally binding document in which you are held accountable for the actions of another. If you decide to guaranty a loan on someone else’s behalf, you are putting your finances and assets on the line. To further protect yourself and your financial well-being, get all financial documents notarized.

Sources

https://definitions.uslegal.com/g/guaranty/

https://www.credit.com/loans/loan-articles/cosigner-what-you-need-to-know/

https://www.investopedia.com/terms/g/guarantor.asp

https://www.thebalanceeveryday.com/where-to-notarize-affidavit-896914

https://www.superiornotaryservices.com/blog/identification-notary-public/

https://www.thebalance.com/why-you-shouldn-t-co-sign-for-someone-else-960995

https://abovethelaw.com/career-files/lawprose-lesson-121-whats-the-difference-between-guarantee-and-guaranty/

https://www.coveringcredit.com/business_credit_articles/Laws_and_Regulations/art845.shtml

About The Author

Chelsea Rivera

Quitclaim Deed: Your Guide To Understanding

/ Uncategorized / By Chelsea Rivera

Life is full of exciting milestones. Graduations, weddings, and big promotions are just a few examples. Amongst these milestones, some people will make the big decision to buy a house. Becoming a homeowner is an exciting step in life. However, owning a home is a huge responsibility. From the very beginning, buying a house involves a lot of paperwork. No property transaction is complete without a deed. Moreover, did you know that there are different types of deeds? In this article, you are going to learn everything you need to know about a quitclaim deed.

What is a Deed?

Before we dive too deep into the different types of deeds, let’s cover the basic definition of a deed itself. A deed is a document that displays ownership of a specific property. The property at hand can be a home, a parcel of land, an office building, or even an island. Any physical property that can be bought and sold will have a deed to prove ownership. When a property changes hands, the previous owner must sign the property deed to transfer the right to ownership to the buyer.

It is important to note that simply signing a deed does not magically officiate new ownership. A title transfer also must occur (more on that later). Additionally, many states require that the deed be submitted on the public record in order to be officially recognized.

What does a Deed Involve?

Like many matters of legal and financial importance, laws and regulations vary by state. Be that as it may, generally speaking, a property deed document will include the following information:

A written indication that the document is, in fact, a deed
Contact information for both the buyer and the seller
Signatures from both of the above parties
A detailed description of the property itself

In most cases, the deed must be physically transferred from the previous owner to the new owner. This action can be as simple as handing it to them.

What is a Quitclaim Deed?

Now that we know what a deed is, let’s tackle the mysterious quitclaim deed. A quitclaim deed (QD) transfers a sellers interest in a specific property to a potential buyer. A foundational element of a QD is unwarranted and unprotected. That is to say, a quitclaim deed does not ensure that the seller actually owns the property they are selling. Certain types of property transactions may benefit from using this type of deed.

Grantor vs. Grantee

In matters pertaining to property ownership transfers you will inevitably hear the terms “grantor” and “grantee”. What is the difference? Which is which? Read on to find out!

Grantor Definition

Simply put, the “grantor” in terms of real estate, refers to the seller. The grantor typically carries more liability in transactions dealing with important assets (such as houses). Therefore, it is an important step for a seller to sit with a lawyer to discuss terms of sale and the type of deed and title transfer best suited for the sale of their property.

Grantee Definition

Conversely, the “grantee” is the buyer. Once ownership has been officially transferred, the grantee will become the grantor in any future sale of the property.

When is a Quitclaim Deed Used?

More than likely, the notion of someone trying to sell something they don’t actually own sounds strange to you. As it should! However, this type of deed is typically used in matters pertaining to families or close friends. Therefore, making quitclaims a bit safer. Some scenarios in which a quitclaim deed may be appropriate:

Simple property transfers between siblings
Ownership transfers from parents to children and vis versa
Adding a spouse to a deed after getting married
Transferring ownership to one person after a divorce (this can save time and money for couples parting ways in an amicable fashion)
The transfer of property to trust.
Changing your name on a current deed (such as after getting married, etc)

Additionally, here are some examples that are non-familial:

Tax deed sales – In the event that a house is seized due to outstanding tax debts, it will sometimes be sold in a public auction. In this case, the seller (i.e. the local government) does not claim any interest in the property itself. Instead, they are looking to recoup the previous owner’s tax debts.
Transferring a property from personal to business use

Quitclaim deeds should be used between two parties that know and trust one another. Exercise caution if a seller you don’t know is encouraging you to use a quitclaim deed for your transaction.

Quitclaim Deed Form

Anyone can easily generate a quitclaim deed form online. Rocket Lawyer, for example, provides an easy to use quitclaim form deed generator. After selecting the state of the property sale, you will need to accurately provide the following information:

Address of the property
Current contact information and marital status of both the seller and the buyer
Date of property sale/transfer
The State where the deed will be signed and notarized
The State tax exemption status
Purchase price (if applicable)
Preference of the grantor to maintain any gas, oil, or mineral rights to the property

Naturally, the above list is just a skeleton of the deed. Requirements vary by state. Be sure to check your local laws to ensure you properly execute your quitclaim deed form. To help illustrate some of the differences by state, we have detailed some state-mandated quitclaim deed requirements below.

Quitclaim Deed California

Once you have filled out a California quitclaim deed, you will need to get it notarized. Next, you will need to need to visit your appropriate local government office to file some paperwork. Depending on your county of sale, that may be a Recorder’s office, a County Clerk’s Office, or an Assessor’s office. There you will file submit your quitclaim deed and file three forms:

Documentary of transfer tax
Notice of Exempt Transaction
Preliminary Change of Ownership Report.

The cost to file a quitclaim in California starts at roughly $15, with the possibility of additional fees of up to $87 dollars. To enumerate, in California requirements can vary on a county to county basis. In other words, the regulations regarding quitclaim deeds in California are not uniform statewide.

Quitclaim Deed Texas

Texas is notoriously fickle when it comes to quitclaim deeds. While the regulations for filing quitclaim deeds vary from state to state, it federally recognized that a quitclaim deed does not guarantee a grantor owns the property they are trying to sell. Texas has a problem with this notion, particularly on the insurance front. If you are smart about purchasing property, you will likely want to acquire title insurance. In Texas, title insurance companies are very unlikely to take on a client involved in a quitclaim deed sale.

If you are on either end of a quitclaim deed transaction in Texas, Deed Claim has a very thorough breakdown of requirements.

Quitclaim Deed Arizona

A properly filled out quitclaim must be notarized to be considered valid in Arizona. It is essential that the grantor and grantee sign the quitclaim in the presence of a notary public. Then, the grantee will pay the appropriate fees to file the quitclaim with the appropriate county recorder’s office.

In some cases, the state of Arizona may mandate the filing of an affidavit of property value. This affidavit would require a separate notarization to be filed properly.

Other Types of Deeds

What do you do if you are purchasing a piece of property from someone you do not know? What type of deed do you need? Well, there are three alternative deeds used in the transfer of property ownership: general warranty, specialty warranty, and bargain & sale.

General Warranty Deed Definition

One of the more common types of deeds in a property sale is a general warranty deed (aka warranty deed). In this case, a grantor does, in fact, hold the title of a property and has the proven right to sell it as the owner. Additionally, the grantor takes responsibility for any possible liens of creditor issues with the property. This guarantee goes as far back as the origin of the property – whether or not the grantor owned the property since then.

A general warranty deed offers the best protection for the buyer. When the grantor signs the general warranty deed, they protect the grantee from any possible title issues. For this reason, mortgage lenders prefer the use of general warranty deeds are used in the sale of residential property transactions.

Elements of a General Warranty Deed

A proper general warranty deed will include:

The name and contact information of the grantor
The name and contact information of the grantee
A written statement that the current owner is selling the property to the buyer
A legally acceptable description of the property (which can typically be found on the previous owner’s deed)
A written statement that the current owner (grantor) is the current legal owner of the property and therefore has the ability to sell it
Written confirmation that should claims arise, the grantor will cover them instead of the grantee
A written statement that the grantor does not know of any current legal claims or liens on the property

You will likely notice the above list does not include any financial details, such as the sale price or property value. A general warranty deed legally portrays the intent and ability to transfer ownership.

Specialty Warranty Deed Definition

Similar to a general warranty deed, a special warranty deed guarantees that the seller owns the property and therefore has the legal right to sell it. The primary difference is that a specialty warranty deed only holds the grantor liable for warrants that occurred during the grantor’s period of ownership. This type of deed helps protect the grantor aka the seller. This type of deed is commonly used for transactions dealing with commercial properties.

Both special warranty deeds and general warranty deeds protect the buyer by guaranteeing:

The seller actually owns the title to the property
The seller has the legal right to sell the property
That the property is still available for purchase
To the knowledge of the seller, the property is debt-free (unless otherwise stated in the deed)
The seller is liable for any problems with the property (unless an agreement has been made to the contrary)

Bargain and Sale Deed

Like specialty and general warranty deeds, a bargain and sale deed guarantees that the grantor owns the title and right to sell the property. However, a bargain and sale releases the seller of any liability regarding possible warranties outstanding on the house.

This type of deed is most often used in the event of tax sales and foreclosures. In this case, a bank or government body typically takes over the property in question. The said authority has it typically less informed regarding the history of the property. Therefore, they do not want to be held liable for any outstanding warranties.

Elements of a Bargain and Sale Deed

The following provisions are likely to be detailed on a bargain and sale deed:

Date of sale
The names of the grantor and grantee
The purchase price of the property
Type of property sold (residential, commercial, etc)
A legal description of the property
Verbiage releasing the seller of liability in regards to any possible outstanding warranties such as: “grantor grants and releases or grants, bargains, and sells”

How do I get a Deed Notarized?

As you may have noticed, all types of deeds require notarization in order to be valid. What does that mean exactly? Notarization has existed, in some form or another, for countless centuries. In modern America, a notarization is done by a certified notary public. A notary public is an official representative of the secretary of state.

A notary public acts as an impartial witness to the signing of documents of great value. Therefore, it is not just property deeds that require notarization. Divorce papers, prenuptial agreements, and affidavits are just a few other documents commonly requiring notarization.

A notary not only witnesses the signing of documents but validates the signer’s identity. Furthermore, a notary ensures that the signer understands the contents and is signing willingly. The primary purpose of notarizing documents is to prevent fraud. A notary is not allowed to give legal advise or act as an attorney.

Where to find a Notary Public?

Fortunately, you should not have to look too far to find a notary near you. Depending on where you live, you can likely find the services of a notary at several local businesses. Some good places to look are:

Your office – Several companies offer onsite notaries to streamline internal company paperwork processing. As an employee, you should be able to use these services for personal matters as well
Banks – Arguably the most common place to find a notary is a bank. Better yet, if you are an account holder, sometimes they will offer free notary services as an added benefit of being their client
Real estate or insurance offices – Whether or not you are a customer at these establishments, if they have a notary, they have to help you. Notary publics serve the public
Local Government establishments – From public libraries to city hall, there is a notary at a local government office waiting to help you
Military Bases – If you or a relative are active military, you should be able to access free notary services at your military base
Mobile notaries – Better yet, why run around trying to find a notary when they can come to you! This option is especially common for those living in large cities

Bear in mind that notary hours and ability are subject to the establishment. Do some research on your area to find the best notary service near you.

What do I Need for a Notarization?

Save yourself valuable time and money by coming prepared to your notary appt. State notary laws and requirements vary from state to state. However, the following list is a good place to start.

Proper Identification

The cornerstone of a successful notarization is proper identification of the signer. Therefore, the presentation of a proper form of identification is crucial. The most commonly accepted forms of i.d. are a valid passport or driver’s license. Essential elements of a valid i.d. for a notary include:

A recent photo
Your signature
A brief physical description (hair and eye color, etc)
The issuing authority (i.e. Texas, California, U.S.A, etc)

If you have an alternative form of identification, be sure to check with your local notary to make sure it is acceptable.

The Document

This should go without saying, but don’t forget the document you need notarized! Be sure to fill out all the required fields beforehand to save time. However, resist the urge to sign! Most states require you to sign in front of the notary.

All Required Parties

Most documents require signatures from more than one person. If all the necessary parties attend the notary appt at the same time, you can save time and money. In the event that is not a possibility, it is legal to have signatures notarized at different times, even by different notaries. However, this process adds considerable time delays and fees along the way.

The Notary Fee

Prices of notary services depend greatly on a number of factors. Fortunately, most states do not allow notaries to charge more than $10 per signature. Some notaries can, and will, charge extra fees for certain services. For example, mobile notaries typically charge for time and mileage to cover their travel expenses. If you suspect someone is overcharging you for notary service, be sure to report it to the proper authorities.

Deed vs. Title

It is vital to understand the difference between a deed and a title. Both deeds and titles are legal instruments used in the transfer of property. However, they carry entirely different weights in terms of actual ownership.

A title is a document that proves ownership of a property. If your name is on the title of a property, you have the right to access, alter, and sell the property as you please. Some titles detail the partial ownership of a property or entity. For example, your name may be on the title for a condo in a large residential complex. You would have the right to modify and sell that particular unit as you see fit. You would not, on the other hand, have the right to sell the building in its entirety.

Conversely, a deed is a written document that details the transfer in the interest of a property title from a seller to a buyer. A deed must be notarized and filed with the county registrar to be officially recognized by the state. It is important to understand that a deed does not legally officiate an exchange in ownership. The buyer must apply for a new title to officially bear ownership to the property.

How to Apply for a Title

The title process is different in every state. To protect your assets, be sure to specifically research the title process for the state where you purchased a property. Fortunately, Discover has some wonderful general best practices regarding property titles.

Quitclaim Deeds: In Summary

First and foremost, it is essential to take the time to understand the deed and title process recognized by your state. Rules and regulations vary widely across state lines. Avoid expensive legal troubles by abiding by the appropriate state guidelines regarding transfers of property ownership. Nationwide, quitclaim deeds do not guarantee that a seller has any legal right to the property in which they are selling. Therefore, quitclaim deeds are primarily useful in matters dealing with family and trusted friends. Anyone could draft a quitclaim deed for the Golden Gate Bridge, but that doesn’t mean they own it and have the right to sell it! If you are buying property from a third party, be wary of a seller with a quitclaim deed.