馃攳
Titles and deeds in real estate | Housing | Finance & Capital Markets | Khan Academy - YouTube
Channel: Khan Academy
[0]
- [Voiceover] Let's say that this is me
[2]
in this column over here,
[4]
and that this is you in
that column over there.
[6]
And let's say that you are in possession
[9]
of a nice juicy, of a nice
juicy apple right over here.
[15]
Let me draw this apple properly,
[17]
let me make the leaf in green.
[20]
So you are in possession of this apple,
[23]
and I'm hungry, I would
like to have an apple.
[27]
And I just assume while
you posses this apple,
[30]
I assume that you own it,
[32]
so I go up to you and say,
[33]
"Hey, can I buy this apple from you?"
[34]
And you say, "Okay, yeah.
I don't really need it,
[36]
"I'll sell it to you for a dollar."
[37]
And so I give you a dollar,
[41]
I give you one dollar, and
then you give me the apple.
[45]
Then you give me the
apple, so now I have it,
[49]
so now I have the apple.
[51]
Somehow the apple got smooshed
[53]
a little bit in the transaction.
[55]
So now I have, I have,
now I have the apple.
[60]
Now when I did that transaction,
[62]
there were some
assumptions that were made,
[64]
I assumed that possession of the apple
[67]
was equivalent to ownership of the apple.
[69]
I assumed, whoops, I assumed possession
[74]
is equal to ownership.
[76]
And you might be thinking, "Wait, wait,
[78]
"under what cases would possession
[80]
"not be equal to ownership?"
[82]
Well what if you just picked this apple
[84]
from your neighbors garden?
[86]
The rightful owner of that
apple is your neighbor,
[88]
but you just picked it,
[89]
maybe you swiped this
from the corner store.
[91]
Maybe you found this on a bench
[93]
and you said, "Okay, well it doesn't seem
[96]
"anyone else is claiming it.
[96]
"So I'm just going to claim this apple."
[98]
But maybe someone else
had left it on the bench,
[100]
and then they come back an hour later,
[101]
said, "What happened to my apple?
[102]
"I'm the owner of that apple."
[104]
So you see that even in
the case of an apple,
[107]
possession might not
be equal to ownership.
[110]
So these two things
might not be equivalent.
[112]
But for something as small as an apple as,
[115]
I guess you could say financially
[116]
not as important,
something that's you know
[119]
has a market value of a dollar.
[122]
It might be too much trouble to kind of
[124]
do a background check on the apple
[126]
to see do a forensic analysis to see
[128]
who is guarding the apple came from
[130]
or to see is someone else had legal right,
[133]
legal title to the apple.
[135]
And so for things like apples,
[137]
we tend to just transact just assuming
[139]
that possession equals ownership.
[142]
Now let's take, let's up
the stakes a little bit.
[145]
Instead of an apple, let's say we're
[146]
talking about a house.
[148]
So let's say that you are in possession
[150]
of this nice yellow house.
[153]
So let me draw, we
definitely want to visualize
[156]
what a nice yellow house would look like.
[158]
It's got some windows here,
[160]
so and there's some nice gardening.
[164]
There's, so you, you are in possession
[169]
of this nice house.
[170]
So what does possession
of the house means?
[171]
Well, it means you're living in it,
[173]
you have the keys to the house,
[174]
your station wagon is in the driveway.
[177]
Your stuff is in the
closet, your furniture.
[180]
You have pictures of you
and your family on the wall.
[183]
So you seem to be in
possession of this house.
[186]
And you stick a for sale sign out on.
[189]
So, for sale.
[192]
So you put a for sale sign
outside of this house,
[197]
and I'm new to town, and I need a place
[199]
for me and my family to live.
[202]
And so I say, "Hey, you know,
[203]
"I'd like to buy that house.
[204]
"How much is it?"
[205]
And you say, "It's $100,000."
[207]
You say, "Okay, it seems like a reasonably
[209]
"good deal compared to other houses
[211]
"in this neighborhood.
[212]
"I want to buy it."
[213]
And you say, "Great."
[214]
So I walk up to you, I write a check
[217]
for maybe I even have cash for a $100,000.
[222]
So a little bit more serious transaction
[225]
than the apple transaction.
[227]
And then in exchange you give me
[230]
the keys to the house.
[232]
So now I have the keys to the house.
[234]
I'll draw some keys here.
[236]
So keys to the house.
[237]
And you say, "Give me an hour."
[240]
And you pack up all of your stuff,
[241]
take your pictures off the wall,
[242]
put them in your station
wagon, and you leave.
[244]
And you say, "Okay well, I guess I'm just
[246]
"going to move in to the house."
[248]
Now, you probably are thinking,
[250]
"Something is suspicious here.
[252]
"Something is, makes us feel
a little less comfortable
[255]
"doing this transaction than this
[256]
"transaction over here."
[258]
Because this house,
just because the person
[261]
happen to be in it and had the keys to it,
[263]
didn't mean that they owned the house.
[266]
So once again, possession
does not necessarily
[269]
equal ownership.
[270]
We can think of a lot
of scenarios for a house
[272]
where possession does not equal ownership.
[274]
They might have been renting the house,
[277]
they might have been renting.
[278]
They might have been guest in the house.
[281]
And maybe the owners, the real owners
[283]
were off to work and their
faces were in the pictures
[286]
just because they were
the owner's brother-in-law
[288]
or something.
[289]
So maybe they were guest in the house.
[291]
Maybe they were,
[292]
maybe they just saw a vacant house,
[294]
maybe this is someone
else's vacation house,
[296]
and said, "Hey you know what,
[297]
"I know these people don't show up
[298]
"during the summer, so
I'm just going to go there
[300]
"change the locks, have the keys,
[302]
"and I'm going to pretend
like I live there.
[304]
"And then I'm going to
try and find somebody
[305]
"new to town and I'm going
to sell them the house
[307]
"for a $100,000."
[309]
And if you think all of these things
[310]
are kind of crazy scenarios,
[311]
they've all happened.
[313]
Because as you can imagine
[314]
there's some people for whom who have
[316]
who are I guess a little
bit less scrupulous,
[319]
who's ethics are questionable,
[322]
who could be very tempted by this.
[323]
So you could imagine for,
when you're talking about
[326]
big dollar figures, people have tried
[328]
some fairly major scams.
[330]
So how do you, and you
know, and once again,
[332]
just in the case of the apple,
[334]
maybe someone left it on the bench,
[335]
and someone thought that it was their,
[337]
you know you thought it was your apple
[338]
now that you found it.
[339]
There could be, it doesn't
have to be just scamming,
[341]
it could be, I thought
I inherited this house,
[343]
but then some other relatives shows up,
[346]
who is closer to the
previous owner of the house,
[349]
and said, "No, no, wait, wait, wait.
[350]
"You can give that
house to the son-in-law.
[353]
"I am his younger brother or
I am his long lost child."
[357]
Or whatever else it might be.
[360]
So you might have thought
that you own the house,
[362]
but there might have been
some other claim on it.
[364]
And maybe you bought the house out right
[367]
or you thought you bought it,
[367]
but maybe the previous owner had you know
[370]
was in a dispute with their
brother or their sister
[372]
over the house.
[373]
So there could be other claims on it.
[376]
And so the way that, the
way in modern society
[379]
is that we deal with this,
[381]
where we see who has ownership rights
[382]
or another ways of thinking about it,
[384]
who has title?
[385]
So this is an important word.
[387]
Who has title?
[390]
Or I guess you could say proof of title.
[392]
When I talk about title,
[393]
this is ownership rights,
[394]
we're talking about real,
right to live in the house,
[396]
it's a right to do what you, you know,
[399]
garden around the house,
[400]
has the right to modify the house.
[402]
So the question of who has
title or evidence of title,
[406]
evidence of title, happens
through legal documents.
[409]
Evidence of title.
[411]
And these legal documents
are called deeds.
[415]
So let me write them.
[417]
So the legal type.
[418]
These legal documents are called deeds.
[423]
And deeds, so when I,
so if I wanted to buy
[426]
this house from you,
[427]
you would, we would get an attorney,
[432]
and then we would draft
a deed that transfers,
[434]
that transfers the
property from you to me.
[438]
But you're saying, "Wait, wait, wait,
[439]
"that still doesn't you know prove to me
[442]
"that the house is all good."
[445]
And then that's why I would
do a title search on it.
[447]
So there's actually companies
that do title searches,
[449]
and they're going to go
to the public records,
[452]
to the city or county records,
[453]
and they're going to
see, "Hey, what are all
[455]
"the deeds that have been
filed with the city?"
[457]
And whenever there's a deed,
[459]
if things have done properly,
[460]
it needs to be made of public record,
[462]
it needs to be filed
with the city or county.
[465]
And so when you do a title search.
[467]
So when you do, let's
do in a different color.
[470]
When you do a title search,
[475]
whoever is doing the title search
[477]
will look at the public records,
[478]
and they'll look at
all the previous deeds.
[480]
They'll look at the deed
that from the previous owner
[485]
of the house to you,
they'll look at the deed
[487]
from the previous owner even before that,
[489]
and they'll make sure that all of the
[491]
the titles, the title
transfer has been cleaned,
[495]
that there hasn't been any
weird claims on the house,
[497]
that there haven't been
liens on the house.
[499]
We'll talk more about what a lien is.
[501]
A lien is essentially
a claim on the house,
[504]
maybe three owners ago someone didn't pay
[506]
property taxes, and the
city is still saying,
[508]
"Hey, whoever owns this
house, owns us a $1000."
[511]
Maybe four owners ago there was someone
[513]
who did an improvement to the house,
[515]
and said, "Hey, that owner never paid me
[516]
"for the new driveway.
[517]
"I have a lien on this house.
[519]
"Whoever is benefiting from this driveway,
[521]
"who owns this house,
they still own me money
[523]
"before I were to remove that lien."
[527]
So the way that we do it
in a modern society is,
[530]
Okay, you say you're selling this house,
[532]
but before I actually give you the money,
[534]
I'm going to do a title search,
[536]
I'm going to make sure that there aren't
[537]
any other claims, I want to make sure
[538]
that you are the real
owner of the property.
[540]
And only then will money be transferred.
Most Recent Videos:
You can go back to the homepage right here: Homepage