Free Online Deed Forms and Why You Shouldn’t Use Them

If you need to transfer real estate, you need a deed. Perhaps you have looked online for free online deed forms. To the average person, these forms may seem to be adequate to transfer real estate. But there are dangers with online deed forms that many people do not realize.

Dangers of Online Deed Forms

There are several dangers associated with free online deed forms. The most common dangers are discussed below.

Online Deed Forms are Static and May Not Match Your Goals

You wouldn’t file someone else’s tax return as your own. You recognize that the information entered on that person’s tax return is specific to that person’s income. It may be perfectly accurate for that person, but it doesn’t match your situation.

In the same way, the static, fill-in-the-blank deed forms that you find online were designed for a specific situation. The person that created the form had to decide:

• Whether the owners involved are individuals, businesses, or trusts and what corresponding language to include;
• What type of warranty to include and the special language required to be legally effective;
• How many owners were included on the deed;
• If there are multiple owners, the form of co-ownership to use;
• Whether the deed should be structured to avoid probate;
• Whether there are any special considerations, like deceased or disabled owners;
• Whether the property is homestead and, if so, what special rules apply to transferring homestead property;
• What type of consideration to include in the deed;
• The source for the legal description of the property; and
• Many other related decisions.

These choices may have worked fine for someone else, but the probably do not match your goals or your specific situation. With a static, fill-in-the-blank form, it is impossible to tailor the deed to your specific situation. You are locked in to the choices that the form creator made in designing the form.

Many Online Deed Forms are Not State-Specific

For a deed to be valid in your state and your county, it must comply with the laws of your state. The laws of each U.S. state differ from the laws of every other U.S. state. Each state has its own laws for validity of a deed, as well as its own specific deed format and recording requirements.

Many online deed forms are generic. They are created using a one-size-fits-all format. Given the variations in state law, these generic deeds may not meet your state’s requirements for validity and recording.

Many Online Deed Forms Do Not Provide Transfer Guidance or Supplemental Documents

Creating a deed is only the first part of transferring real estate. There are other steps that need to be taken in order to file the deed with the county land records and complete the transfer of real estate. Most online deed form providers only give you a form. They do not provide you with the information you need to complete the transfer in your state.

There are also supplemental documents that must be created in some states in order to accomplish specific goals. For example, partition agreements may be needed to convert community property to separate property. Similarly, survivorship agreements may be needed to create a joint tenancy with right of survivorship. Most online deed forms do not include these types of supplemental documents.

The True Cost of Online Deed Forms is Often Hidden

Online deed forms are attractive because they are free. But the true cost of these forms may be hidden. If there is a problem with the deed, you may not know about it until later. If you are using a deed for estate planning purposes, you may not find out about the problem at all. Instead, your family will discover the problem after your death. These latent title issues can be difficult (and expensive) to correct, making your “free” deed an expensive option.

Many people believe that if the county clerk accepts the deed form, it must be fine. This is usually not the case. County clerks are not attorneys and, as a general rule, do not review the deed for accuracy or to be sure that it meets your goals. The county clerk’s role is to ensure that the document is recorded, not to evaluate the document to be sure that it is legally accurate. In fact, some states prohibit a county clerk for rejecting deeds that meet recording requirements, even if they have obvious legal defects.

Options for Creating Your Own Deed

You have three basic options for obtaining a deed. First, you can see a lawyer and have the lawyer create a deed for you. This option is likely to provide a legally compliant document, but comes with the expense of legal fees.

Second, you can use an online deed form. These forms can be low cost (and in some cases free). But, for the reasons described above, online deed forms are usually low-quality and a poor choice for transferring real estate.