Dollar amount on Deed is $10

7 Replies

I recently acquired my second property.  One of the papers I had to sign at the escrow office was the Statutory Warranty Deed.  It states:

"THE GRANTORS Joe Jones Jr. and Janet Jane Jones, husband and wife for and in consideration of TEN DOLLARS AND OTHER GOOD AND VALUABLE CONSIDERATION in hand paid, conveys and warrants to Charles David an unmarried individual the following described real estate, situated in the County of King, State of Washington."

I had questioned the escrow closing agent about the amount that was entered on the Deed $10 and they told me it was the filing fee.  

It seemed to me that this should have been the sales price $150,000.  

My question:  Is this correct?  If not, why would they change this amount to $10 and not state the sales price?

My real estate agent was not present at the signing he was traveling out of state. So I asked him about this matter a few days later and he said he would check into it.  When he got back to me the next day he said this was in fact not the amount for the filing fee and that it was correct and that is a standard statement escrow companies use on deeds and I didn't have any thing to worry about.

Thank you.

Its what is generally put on deeds in NON Disclosure states.

The title company could have put the true conveyance amount on the deed.

and its also why Zillow and truila values can be so very wrong and have wild swings as they pull their data from those docs. and in non disclosure state were every transfer says 10 they have a real hard time with accurate numbers.

@Charles David

 $10.00 and other good and valuable consideration is typical language, as @Jay Hinrichs mentioned.  This was originally started to allow for purchase price confidentiality since a deed is recorded in the public records. If there is a lender involved, a vendor's lien will usually be included in that section of the deed as well. It has nothing to do with filing fees.

There are still 7 states that do not disclose sale prices and this is one of the ways to keep that information only somewhat more unavailable to prying eyes. 

Guy is totally correct as well as Jay! Just to go along another path adjacent to consideration given.

Consideration is required for an exchange of title and to form any contract. A dollar amount and the phrase "for good and valuable consideration" may or may sufficient in a transfer of title and may not be the same as described or required in a purchase contract that conveys an equitable interest.

Mixing these two concepts is incorrect.

When a purchase contract is made, legal title remains with the seller, but equitable title is given to a buyer, full title is in  state of limbo until settlement.

Equitable title must be financially measurable, if it is not measurable or cannot be established and is an amount customarily accepted, equitable title may be limited or may not exist. This applies to financial equity arising from a sale contract. Other equitable interests such as through inheritance matters is not necessarily a financial matter.

$10 on a sale contract is the financial interest in an equity position to the asset being purchased, the sufficiency of that is a matter of the value of the asset. $10 is not a sufficient financial interest in a $100,000 property, it would be for a $50.00 item, and this is dictated by what is acceptable. 

There are issues with making a promise as well in a contract, but a promise doesn't establish a financial basis to measure a financial interest. Having a financial equitable interest is what is conveyed with a sale contract and what investors usually attempt to sell or assign, as having a valuable interest in a property.

Any contract only takes the parties to a settlement, if all is agreeable, the parties may continue with the terms to a settlement, so long as they have a legal contract.

The question of an equitable interest can come up if a seller decides to avoid a contract and not sell. If the equitable interest gained by a buyer is insufficient for the amount of the sale price of an asset, if it is not usual or customary, if it is only a small token amount, the seller can avoid their obligations as the contract may be seen as frivolous, not in good faith. 

So, the original post in seeing $10 as consideration for a deed with other good and valuable consideration (which is probably $149,990.00 and not just a promise) is an acceptable phrasing used, but that has no bearing on the sufficiency of any consideration paid in a purchase contract. 

So, all the investor/operators out there giving $10.00 as a down payment on a sale contract, your contract may not stand as having a sufficient equitable interest. Your local judge will let you know. :)    

All of mine use the same language with the $10.  If difficult to find out what was paid for the property (not listed in the deed and sales history of assessor's site), divide the excise tax paid (which will be stamped on the deed) by the % the the town/city charges.  The % excise tax paid by the county will get you super close.  

Here in the great state of WA the excise tax is generally about 1.7% but varies a little by the specific county and town.  Expensive here to buy and sell!

@Bill Gulley you seem pretty sure of yourself despite finishing with the comment 

Your local judge will let you know. :) 

I have yet to find an attorney that can tell  me whether an earnest money deposit is even required at all, in a real estate contract. 

As you know consideration must go in both directions to form a contract. Why is the promise to buy at a specific price, not as valid a form of consideration as is the promise to sell at a given price?

Originally posted by @Ned Carey :

@Bill Gulley you seem pretty sure of yourself despite finishing with the comment 

Your local judge will let you know. :) 

I have yet to find an attorney that can tell  me whether an earnest money deposit is even required at all, in a real estate contract. 

As you know consideration must go in both directions to form a contract. Why is the promise to buy at a specific price, not as valid a form of consideration as is the promise to sell at a given price?

 Different animal, no an earnest money deposit isn't required the promise may well do it, I'm speaking of an equitable interest being established and the degree of that interest. The contract alone establishes some interest, an equitable interest, but it is not measurable and therefore may not be enforced. If your sell goes to settlement, all is good. Point is, sometimes they may not and they may both legs to stand on to get out of your nothing down contract, usual and customary is also at play. Here, a judge will throw it out and this area is not that unique, IMO. :) 

PS. Good blogs on equitable interest in the Harvard Law Review if anyone want to study it more:)