A Quick Guide to Different Kinds of DeedsNovember, 01 2018
A deed is the means by which a real estate title is transferred from one party to another in the purchase, transfer, or sale of a property. Since there’s more than one way to purchase a home, there are a few different types of real estate deeds you can use when completing this transaction. Let’s take a look at some of the most common deeds used in real estate transactions so that your purchase or sale is as smooth as possible.
General Warranty Deeds
Most traditional home sales use a general warranty deed. This deed serves as a warranty that the state of the property’s title is clean. A clean title allows the buyer the comfort of knowing that the seller has sole claim to the property and that there are no other entities that have a claim or lien on the land or the home itself.
A general warranty deed promises the buyer that they can legally purchase, retain and enjoy their new home. To obtain a general warranty deed, a title search will be conducted by your title insurance company, who will then allow you to purchase a title insurance owner’s policy for further peace of mind and protection in the real estate transaction.
Special Warranty Deeds
Not all property titles are clean at the time of the sale. It is because of this that special warranty deeds exist. This type of deed is typically used to address defects to the title that arose during the seller’s ownership of the home. Title defects need to be cured before you can purchase the property, and this deed helps make a smoother home purchase possible. It does not, however, grant full protection from future title claims, which is why it’s important to work with a professional title insurance company when purchasing a property with title defects.
This type of deed is often referred to as an “as-is” deed. The quitclaim deed exists to transfer any interest, title, or claim the seller has to the buyer. There is, however, no title search involved, which means it does not guarantee that the title is clean or valid. Quitclaim deeds are good for correcting typographical errors in existing warranty deeds and can also be used to add or remove someone from the title in instances where a property is gifted to a family member without a traditional sale taking place.
Bargain and Sale Deeds
A bargain and sale deed is similar to a quitclaim deed, but it can also be written with covenants which offer the buyer added peace of mind that the seller does in fact own and has the full right to sell the property. This type of deed is commonly used in situations like foreclosures or court seizures. Unfortunately, title insurance coverage is not always conveyed along with bargain and sale deeds, which leaves the buyer exposed to future claims from third parties.
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