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All deeds are to be signed in front of a Notary Public (just the grantor) and the grantee is to also sign the Certificate of Residency. Afterward, the deed may be filed with the Recorder's Office in the jurisdiction of the property.

When it comes to taxes, a deed in lieu may incur tax consequences because of the deficiency or the amount unrecovered,after the property's sale. Forgiven debt is viewed by the IRS as income. In turn, they may tax you after the fact. You May however be eligible for the insolvency exemption.

Disadvantages of a Deed in Lieu of Foreclosure The most obvious disadvantage to you is the loss of your property, any income from the real estate, and your home investment. There are tax costs associated with the conveyance of property as well.

The most commonly recorded documents by individuals are deeds. To add, remove, or change a name on a deed, have a lawyer, title company, or other real estate professional prepare the deed. Then, record the new deed with the Department of Records. Note: We recommend that you do not prepare a deed on your own.

A deed that transfers title to DC real estate must be filed with the recorder of deeds for recording to provide notice of a transfer to third parties. DC law requires a deed to be recorded within 30 days after it is signed and notarized.

There's less negative impact on your credit score. As with any negative event impacting your credit, the higher your score is before the negative impact, the bigger the drop will be. With a deed in lieu of foreclosure, the drop might be anywhere from 50 to 125 points or higher.

Damage to your credit: While less severe than a foreclosure, a deed in lieu of foreclosure damages your credit significantly, and can make it difficult to qualify for another mortgage for several years.