A surgeon or mechanic uses specific tools to accomplish certain tasks. Likewise, in a real estate sale, there are different types of deeds you can use, depending on the outcome you want to accomplish. You might be a first-time home buyer getting ready to close on your starter home. Or, you could be a seller trying to get rid of your property. Either way, it’s important to recognize the advantages and disadvantages of each type of deed you could use.
Let’s take a look at three of the most commonly-used types of deeds in real estate transactions.
General warranty deed
These deeds are also referred to as simply “warranty deeds.” They provide the greatest protection for the buyer, because they contain specific covenants that legally bind the seller.
For example, when a seller executes a general warranty deed, they are promising that they have legal title to the property, that they have the right to convey it, that there aren’t any undisclosed encumbrances on the property and that they will defend the buyer against claims to the property by third parties.
Special warranty deed
A special warranty deed is similar to a general warranty deed, but the covenants that bind the seller are more limited. In a special warranty deed, the seller is only guaranteeing that the property is free of encumbrances that arose while the seller owned the property, not before.
A quitclaim deed provides the least amount of protection for the buyer. It conveys to the buyer only the rights that the seller has in the property, and makes no promises or covenants concerning encumbrances on the land.
In other words, if you’re going to purchase a property, it’s best if you do your research and make sure that no third party has a claim, easement or lien on the property before you sign a quitclaim deed for it.
Choosing the right type of deed can be confusing and tricky. Luckily, you don’t have to make this decision alone. An expert real estate attorney will be able to examine your circumstances, and help you to decide which type of deed is best for your particular situation.