In real estate, a deed is a legal instrument which affirms ownership. It contains the names of the old and new owners and a legal description of the property being transferred. Many people think that all deeds are the same. But generally, there are three types of deeds that are used when conveying real property. Below is a brief description of each.
General Warranty Deed: A general warranty deed guarantees that the grantor (seller) has good title to the property, meaning it is free of liens or claims of ownership, and he has a right to sell it. This is the most secure as well as the most common type of deed. This type deed basically ensures a buyer that he will receive good legal title. The guarantee is not limited to the time the seller owned the property – it extends back to the origin of the property.
Limited Warranty Deed: A limited warranty deed, sometimes called a special warranty deed, guarantees that the grantor (seller) owns the property and has had no title problems only during his period of ownership. The seller makes no guarantee of the title prior to him taking ownership. This type deed is better than a quitclaim deed, but not as secure as a general warranty deed.
Quitclaim Deed: A quitclaim deed transfers whatever title the grantor has in the property to the grantee. It does not guarantee the grantor has any legal title, or that the title he’s conveying is valid. This is the least secure type of deed. Quitclaim deeds are used mostly when transferring property between family members, or where there is less worry about title problems. This type deed can be especially useful if it isn’t clear how much of an interest, if any, a person holds in a property. Quitclaim deeds are also frequently used when there is a “cloud” on a title – that is, when a title search reveals that a previous owner or some other individual, like an heir or previous owner, may have some claim to the property. The individual can sign a quitclaim deed to transfer any remaining interest in the property.
Rod Rogers is an Accredited Land Consultant and one of the owner/brokers of The Metcalf Land Company.