Fear Not! You Did NOT Just Sell Your House for $10!
Virginia deeds often say something like the following: “That for and in consideration of TEN DOLLARS ($10.00), cash in hand paid, and other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, the Grantor does bargain, sell, and convey unto the Grantee the following described real property…” Does this language mean you just sold your house for $10?! No!
In a real estate transaction, there are two key steps:
- The sales contract, which is the written agreement between the buyer and seller specifying the key terms of the sale. The contract does not transfer ownership of the property.
- The deed, which is the publicly recorded document that legally conveys title from seller to buyer.
A valid contract requires consideration. Consideration means something of value is exchanged and legally requires a promise, act or forbearance from each party, and an exchange of value where each gives something for the other’s promise, act or forbearance from acting.
In the sales contract, the earnest money deposit is typically the consideration.
In the deed, the consideration is stated as a recital of fact – there was consideration that passed between the parties.
Is the actual sales price also stated in the deed? Yes, typically the actual sales price and tax assessed value are stated within the margins of the deed so that the recording clerk collects proper recordation taxes.
At the end of the day, why do we keep talking about $10 consideration in Virginia deeds? It’s tradition!
