The Different Types of Deeds

There are actually many kinds of real estate deeds, many more types than most investors actually realize. The question of which type of deed to accept from a seller of property when buying real estate is more important than you may realize. Each type confers different rights, guarantees, and degrees of buyer safety.

The role of defining what you are buying and what you are actually selling is filled by a deed.
A deed is a written, legal instrument conveying title by the owner of land (also called the "grantor") to a buyer (the "grantee").
Five Points to Always Remember About Deeds:

1. A deed must be in writing. There is no such thing as an oral deed.

2. A deed is not the title to the land but merely an instrument, which transfers title. Some people think that a deed acts like the legal title to an automobile. It does not.

3. A deed must conform to all the elements of state law for it to be a legal instrument. Just because two parties to a transaction decide a paper written between them represents a deed does not make it so. State laws require specific language and many legal formalities.

4. A deed does not have to be recorded at a county courthouse, city hall, or land record office to be legal. Recording a deed merely publishes the deed and gives everyone else in the world interested in the identified property that there has been a change in ownership. There are many legal deeds that have never been recorded but in reality all deeds really should be recorded as soon as they are signed and delivered.

5. When you purchase land from us, we will handle the recording of your deed when the property is paid in full.
While there are many types of
deeds, here are the most common types:

GENERAL WARRANTY DEEDS offer the greatest protection for buyers since a seller must warrant (or guarantee) good title to the property, free and clear of all liens and encumbrances not specifically mentioned in the deed. The seller also agrees to defend against any defects found in the deed, acting sort of like a title insurance company for claims caused by defects found later in the transferred title. There are five specific warranties (called "covenants") that sellers make using these deeds and these covenants extend not just during the time the seller actually owned the property but include the entire chain of title.

General warranty deeds impose upon them specific legal duties that can extend for generations into the future regarding defects in title that occurred long ago in the past. As you can imagine, buyers love them for that specific reason.

We use general warranty deeds in states in which is it customary.

SPECIAL WARRANTY DEEDS are much like general warranty deeds but really contain only one covenant and guarantee against claims, which may arise only while the seller was the legal owner of the property.

SALE (or BARGAIN) DEEDS are much like special warranty deeds except that sellers assert only two facts within them. First, they are the legal owner of the property and second, they did not encumber the title to the property in any way while they owned it.

QUITCLAIM DEEDS are the most basic form of deed where the seller conveys whatever interest they have in the property to the buyer with the only warranty being they did not encumber the land in any way. Quitclaims are important when clearing up title defects in land since one party with an interest in a piece of land, however tenuous or unwanted, can clean the title chain by publicly disposing of their interest with a recorded quitclaim.

I could sell you a legal quitclaim deed to the Brooklyn Bridge or the Statue of Liberty!

The deed would agree to transfer any and all ownership interests I have in the property and warrant that I have not encumbered the property in any way.

The quitclaim deed does not specify which interests are being transferred, only all that I possess. It also warrants that I did not encumber the property, hard to do when you are not the legal owner.

When buying or selling real estate, the choice of which type of deed to accept or use is not an academic decision. It literally defines exactly what you are getting for your money or agreeing to sell for cash.