Most people are aware that different types of property are titled to demonstrate ownership. In the world of real estate, that title is referred to as a deed. Typically, a real estate deed contains information like the names of all buyers and sellers in the transaction, a legal description of the property, and the seller’s signature. There are numerous types of real estate deeds, however, and three in particular that individuals should be aware of. A quitclaim deed, a special warranty deed and a general warranty deed each features its own characteristics, and these are the most common types of real estate deeds that the common person might encounter.
Quitclaim Deed
While quitclaim deeds are a little bit less common in traditional real estate transactionsthat special warranty or general warranty deeds, they are sometimes seen when a family member sells property to another family member or when another type of relationship exists between the buyer and seller. Another example of when a quitclaim deed might be used is when a business transfers property to a subsidiary. This type of deed offers no assurances of seller ownership or the in-existence of any encumbrances, unlike warranty deeds.
Special Warranty Deed
A special warranty deed includes assurances that the buyer will not have any type of legal action or title problems due to something that the seller did. If a previous owner somewhere down the line did something that would potentially create trouble for the property, however, the new buyer is not protected.
General Warranty Deed
General warranty deeds are the most common types of deeds seen in typical real estate transactions. This type of deed gives the buyer many more assurances than those offered by other types of deeds. Known as covenants of title, these assurances help the buyer have confidence in knowing that if issues do arise, he or she is protected from not just the issues that might arise from actions caused by the current seller, but from those from previous sellers as well. They specify that:
- The seller owns the property he is transferring
- The seller has the right to sell the property in question
- There are no encumbrances that will follow the sale (continuing mortgages, etc.)
- Covenant of quiet enjoyment
- Covenant of general warranty
- The grantor will execute his best attempt to remedy any applicable issues that may arise
