Full question:
is this the correct consideration for us, a Husband and wife to place our home in our own trust on Usleagals waranty deed form:'FOR VALUABLE CONSIDERATION OF TEN DOLLARS ($10.00), and other good and valuable consideration, cash in hand paid, the receipt and sufficiency of which is hereby acknowledged,'if not what is the proper consideration?
- Category: Real Property
- Subcategory: Deeds
- Date:
- State: Arizona
Answer:
For a contract to be legally binding, there must be adequate consideration. This means that each party must receive a benefit or suffer a detriment that reasonably induces them to enter into the contract. Consideration can be something other than money, but it must involve a change in legal position for both parties.
In many cases, deeds do not state the actual sales price. Instead, they often say, "for $10.00 paid and good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged." This is partly due to the requirements of the recorder's office and privacy concerns about the actual transaction amount.
After the agreed purchase price is paid, the deed is signed. Note that some states require the buyer to pay a tax based on the actual consideration paid, which is reported separately from the deed. For example, if a tax stamp shows $150 on the recorded deed, the property was likely sold for $10,000. Thus, stating only "$10.00 paid" does not exempt the buyer from paying the full tax owed.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.