PSI New Jersey Real Estate State Practice Exam

What type of real estate document typically indicates transfer of ownership?

1. Lease agreement

2. Bill of sale

3. Deed

4. Contract for deed

The correct answer is: Deed

A deed is the correct answer because it is the primary legal document used to transfer ownership of real property from one party to another. The deed contains the details of the transaction, including the names of the grantor (the seller) and the grantee (the buyer), a description of the property, and the signatures of the involved parties. Upon execution and delivery, the deed signifies that ownership has officially changed hands, and it is often recorded in the county clerk's office to provide public notice of the new ownership. While a lease agreement outlines the terms under which a tenant occupies a property, it does not transfer ownership. A bill of sale pertains to the transfer of personal property rather than real property. Lastly, a contract for deed is an installment sale agreement that might lead to ownership transfer, but actual ownership is not conveyed until all terms are met and the contract is fulfilled. Thus, the deed is the definitive document for indicating ownership transfer in real estate.