DeedClaim

Online Deed Preparation

  • Contact Us
  • Deeds
    • Quitclaim Deed
    • Special Warranty Deed
    • Warranty Deed
    • TOD Deed
    • Lady Bird Deed
    • Life Estate Deed
  • How it Works
  • Pricing
  • Get Deed
Get Deed

What is Consideration for a Deed to Real Estate?

What is Consideration for a Deed to Real Estate?

Consideration is a legal term used to describe the value that changes hands as part of an agreement between two or more parties. Consideration is the “what’s in it for me” element of the deal. It is what each party gives the other party as part of the bargain. Consideration could be the payment of money, the discharge of debt, the performance of services, or anything else of value.

Real estate may be transferred with or without consideration. If the real estate is being sold to a third party, the contract will require the buyer to pay a certain amount as consideration to the seller. The contract will also require the seller to sign and deliver a deed (usually a Warranty Deed or Special Warranty/Grant/Covenant Deed) as consideration to the buyer. The obligation of the buyer to pay the sale price and the obligation of the seller to sign and deliver the deed constitutes mutual consideration for the real estate contract.

Consideration could be anything of value, and the recitation of consideration in the deed may not correspond to the actual consideration paid for the property. There are common choices for reciting consideration in the real estate transfer context:

  • Nominal Consideration – Most deeds recite nominal consideration (e.g., “the sum of $10.00”). This keeps the actual consideration private and is common practice in most states.
  • Actual Consideration – Actual consideration is sometimes used if the parties want to publicly document the purchase price paid for the property. But because most states do not require that the actual consideration be listed, most deeds recite nominal consideration instead of actual consideration.
  • Gift – If the property is a gift, there is no consideration. A Gift Deed may state that the property is being transferred “for love and affection” or something similar. In states with documentary transfer taxes based on the amount of consideration (including Florida and California), specifying that the property was a gift can save transfer taxes.
  • Capital Contribution – If property is being transferred to a business, the consideration received in exchange for the interest is often capital in the company. For example, a transferor might receive 1,000 shares of stock in exchange for the real estate being transferred to the company.
Need to create a deed to real estate? Our Deed Generator uses a simple interview that lets you choose the right form of consideration for your deed, then creates a deed based on your choices. Our deeds are valid in all counties in the states where they are used. Click here to create your own Quitclaim Deed in minutes.

Many real estate transfers—particularly those made for estate planning purposes—are made without consideration to the transferor. Common examples of “no consideration deeds” include:

  • Transfers between spouses;
  • Transfers to a revocable trust for estate planning purposes;
  • Transfers from a deceased person’s estate;
  • Transfers made to capitalize a business entity, such as a corporation or limited liability company;
  • Transfers to family members; and
  • Transfers made under a divorce decree or settlement agreement.

When no money is changing hands, the transferor will often use a Quitclaim Deed to transfer title to the real estate.

A deed is not a contract to sell real estate. Rather, it is the fulfillment of the transferor’s intent to transfer real estate. Because a deed is not a contract, many state laws do not require a deed to recite a specific amount of consideration. But to avoid title issues, it is still good practice for the deed to recite at least a nominal amount of consideration (usually $10.00), even if no money changes hands.

If money is changing hands—such as when real estate is being sold—deeds will usually list a nominal amount of consideration (e.g., $10.00) or list the actual purchase price of the property. And some states, including Alabama and Michigan, require that the consideration be clearly stated.

Ready to create your own deed? Our Deed Generator was designed to create customized deeds that include all requirements of the laws of your state. Each deed was designed or reviewed by a licensed attorney to ensure that it includes each element required for validity and recording. Click here to create our own deed in minutes.
Get Deed

Popular Deed Forms

  • Quitclaim Deed
  • Special Warranty Deed
  • Warranty Deed
  • TOD Deed
  • Lady Bird Deed
  • Life Estate Deed

Real Estate 101

  • What is a Deed?
  • What is a Quitclaim Deed?
  • What is a Life Estate?
  • Warranty of Title
  • What is a Legal Description?
  • What is Consideration for a Deed?
  • What are the Forms of Co-Ownership?

Popular Articles

  • How to Avoid Probate of Real Estate
  • How to Add a New Owner to the Title Deed to Real Estate
  • How to Remove a Deceased Owner from a Title Deed to Real Estate
  • How to Correct a Deed | Corrective Deeds and Scrivener’s Affidavits
  • How to Remove an Ex-Spouse from a Deed
  • Do I Need Bank Permission to Transfer Real Estate by Deed?
  • How to Transfer Real Estate with a Power of Attorney
  • Free Online Deed Forms and Why You Shouldn’t Use Them

Get a Customized Deed Now for Only $59.99

Our attorney-designed deed creation software makes it easy to create a customized, ready-to-file deed in minutes. Our user-friendly interview walks you through the process with state-specific guidance to help you create the right deed for your state and your goals.

Free to Get Started

Complete the interview at no charge. Only pay when you’re ready to create the deed.

One-Time, Up-Front Payment

No hidden fees or recurring costs. Just a one-time, up-front fee for a customized deed and any related documents that you need.

Corrections Included at No Charge

Need to make a correction? No problem. Re-access the interview and create a new document at no additional charge.

One-Time Payment of $59.99

Get Started

DeedClaim

Popular Articles

  • How to Avoid Probate of Real Estate
  • How to Add a New Owner to the Title Deed to Real Estate
  • How to Remove a Deceased Owner from a Title Deed to Real Estate
  • How to Correct a Deed | Corrective Deeds and Scrivener’s Affidavits
  • How to Remove an Ex-Spouse from a Deed
  • Do I Need Bank Permission to Transfer Real Estate by Deed?
  • How to Transfer Real Estate with a Power of Attorney
  • Free Online Deed Forms and Why You Shouldn’t Use Them

Popular Deed Forms

  • Quitclaim Deed
  • Special Warranty Deed
  • Warranty Deed
  • TOD Deed
  • Lady Bird Deed
  • Life Estate Deed

Get to Know Us

  • Contact Us
  • Access to Justice Scholarship
  • Real Estate Law Report

Connect With Us

  • Email
  • Facebook

Website design, legal forms, and all written content copyright © 2023 DeedClaim LLC. Automated document assembly software is copyright 2023 lexVentures LLC. No legal services are provided on this site. Your use of DeedClaim.com does not establish an attorney-client relationship. You shouldn’t take anything on this site to be legal advice or make any decisions based on it. | Terms of Use

  • Home
  • Deeds
    • Quitclaim Deed
    • Special Warranty Deed
    • Warranty Deed
    • TOD Deed
    • Lady Bird Deed
    • Life Estate Deed
  • States
    • Alabama Deed Forms
    • California Deed Forms
    • Florida Deed Forms
    • Illinois Deeds Forms
    • Indiana Deed Forms
    • Michigan Deed Forms
    • Texas Deed Forms
    • Utah Deed Forms
    • Virginia Deed Forms
    • Washington Deed Forms
  • How it Works
  • Pricing
  • Get Deed