Deeds tell a story
I was talking to an investor recently that was having a hard time telling the difference between a warranty deed and a security deed. This confusion is not uncommon for investors that mainly buy houses using cash or traditional financing because the attorneys handle all the deed and paperwork.
But this investor was in the middle of buying a subject-to deal. And with that type of deal structure it’s important to know that the warranty deed conveys ownership to a property while a security deed discloses the presence of a mortgage, or other lien, that is attached to the property.
If you are unfamiliar with what deeds look like and what they say, the best place to learn about them is to visit the deed room at your local courthouse.
Now as you walk into a deed room, it can feel a little scary because you’re literally in a vault in the depths of your court house that has a thick steel door similar to something you would see on the safe from a 1930’s bank heist movie. And even though it may smell a little musty because you are on the bottom floor where it is not well-ventilated, don’t let those things deter you. The deed rooms are usually nice places, filled with great people, and tons of information to sift through on properties you’re interested in.
So, what’s in the deed room?
Books… Lots of them. Which are filled with different kinds of deeds and other paperwork that tell the story of the property you’re researching.
Deeds tell you who bought the property from whom, if the buyer was married or single, approximately how much they bought it for, if they paid cash or financed it and if there are any liens on the property. Deeds also give you a description of the land, and the surrounding tracts, plus a lot more information if you are willing to delve into it.
Trying to digest all of this when you’re just starting to look at deeds can feel overwhelming. But you’ve probably been reading books with deeds in them since you were a kid.
Don’t believe me? Flip your Scriptures open to Genius Chapter 23.
Here we see one of the oldest deeds ever recorded. Abraham had just lost Sarah. Far from home and family, he finds himself in need of a burial plot for Sarah. So, he goes to the Children of Heth and offers to buy a field and a cave from a fellow named Ephron. Ephron agrees to sell to Abraham for 400 pieces of silver.
Verses 16-20 say, “And Aḇraham listened to Ephron, and Aḇraham weighed out the silver for Ephron which he had named in the hearing of the sons of Ḥĕth, four hundred sheqels of silver, currency of the merchants. Thus the field of Ephron which was in Maḵpĕlah, which was before Mamrĕ, the field and the cave which was in it, and all the trees that were in the field, which were within all the surrounding borders, were deeded to Aḇraham as a possession in the presence of the sons of Ḥĕth, before all who went in at the gate of his city. And after this Aḇraham buried Sarah his wife in the cave of the field of Maḵpĕlah, before Mamrĕ, that is Ḥeḇron, in the land of Kenaʽan. Thus the field and the cave that is in it were deeded to Aḇraham by the sons of Ḥĕth as property for a burial site.”
As we read this story, it has similar information like we see in the deed books in the courthouse.
For instance, Gen. 23 tells us that Abraham was widowed and that he paid cash for the property. It tells us who was the buyer and who was the seller. Then it tell us the legal boundaries of the property that was sold and the city, state and county the property is located in: “Maḵpĕlah, before Mamrĕ, that is Ḥeḇron, in the land of Kenaʽan.”
That’s the same type information that we see in legal descriptions on deeds we read today.
So, as you explore the deed room, realize that the pages of deed books hold the information that tell the story of the property you’re investigating just like this story form the bible. And looking at it from a story standpoint can really help you to not get confused.
Joe and Ashley English invest in real estate in Northwest Georgia. For more information or to ask a question, go to www.cashflowwithjoe.com