What's a trust deed?

A trust deed (also called a deed of trust) isn't like the other types of deeds; it's not used to transfer property. It's really just a version of a mortgage, commonly used in some states (California, for example).

A trust deed transfers title to land to a "trustee," usually a trust or title company, which holds the land as security for a loan. When the loan is paid off, title is transferred to the borrower. The trustee has no powers unless the borrower defaults on the loan; then the trustee can sell the property and pay the lender back from the proceeds, without first going to court.

What is a contract for deed?

A contract for deed is not really a deed at all. Also known as a "contract of sale," "land sale contract," or "installment sales contract," it's used when a seller finances a property for a buyer. The contract states that the seller will keep title to the property until the buyer pays off the loan.

Does a deed have to be notarized?

Yes. The person who signs the deed (the person who is transferring the property) should take the deed to a notary public, who will sign and stamp it. The notarization means that a notary public has verified that the signature on the deed is genuine. The signature must be notarized before the deed will be accepted for recording.

After a deed is signed and notarized, do I have to put it on file anywhere?

Yes. You should "record" (file) the deed in the land records office in the county where the property is located. This office goes by different names in different states; it's usually called the County Recorder's Office, Land Registry Office, or Register of Deeds. In most counties, you'll find it in the courthouse.

Recording a deed is simple. Just take the signed, original deed to the land records office. The clerk will take the deed, stamp it with the date and some numbers, make a copy, and give the original back to you. The numbers are usually book and page numbers, which show where the deed will be found in the county's filing system. There will be a small fee, probably no more than $15 a page, for recording.