Knowing what kind of deed to use when purchasing, selling, or transferring property may be difficult. Learn more about the many sorts of property deeds here.
What you will discover:
What is the relationship between deeds and property ownership?
What exactly goes into a deed?
What kind of deeds are utilized with real estate?
What is covered by a Warranty Deed?
What is covered by a Special Warranty Deed?
Is using a Quitclaim Deed to transfer property safe?
When would I need a Bargain and Sale Deed?
What distinguishes a Grant Deed from other types of deeds?
Is it possible for me to create my own Grant Deed?
A property deed is a written legal document that proves who owns real estate. The terms “real property” relate to land and what is linked to it, such as a house or crops. Different forms of deeds may be used to award or transfer ownership of real property to another person. The questions and answers below might help you understand the many kinds of deeds and what you may need to do to legally transfer title of a property or piece of land that you are purchasing, selling, or transferring to another person.
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What is the relationship between deeds and property ownership?
Although deeds and real property title interests are connected, they are not the same thing. Title is a legal word used to define property ownership, although it is not a physical document. A deed is the legal document used to transfer title ownership to someone else. A deed is the document that you publish in the public record as proof of ownership of your house. The grantor is the person who grants the ownership right or interest, while the grantee is the one who receives it.
What exactly goes into a deed?
Because a deed serves as formal proof of ownership, it must meet three basic characteristics in order to be legally legitimate and enforceable:
The grantor must be legally entitled to transfer the property, and the recipient must be legally entitled to receive it.
The deed must specify that it is a deed and define what it is transferring in sufficient clarity and depth.
Before presenting the deed to the grantee, the grantor must sign it in the presence of witnesses.
What kind of deeds are utilized with real estate?
The type of a real estate deed is determined by the interest, right, or property that is being transferred. We look at several common deed kinds below, such as Warranty Deeds, Special Warranty Deeds, Quitclaim Deeds, Bargain and Sale Deeds, and Grant Deeds.
What is covered by a Warranty Deed?
When you purchase a new device, it often comes with a written promise – a warranty – that if it breaks down within a particular time frame, the manufacturer or seller will repair or replace it. A Warranty Deed serves the same fundamental function as a home title transfer: the grantor of the Warranty Deed guarantees to the grantee that the grantor possesses clear title to the property and has the authority to transfer it.
These grantor assurances are sometimes referred to in deeds as covenants, which is a legal phrase for an enforceable commitment. Typical grantor Warranty There are two kinds of deed promises:
Present covenants are commitments made by the grantor at the moment of transfer. They include pledges that the grantor has legal title ownership and the authority to transmit the property, that the grantor has not already pledged to transfer the property to someone else, and that the property is free of any unreported liens or other encumbrances.
Future covenants: After the grantee takes possession of the property, the grantor’s promises to protect the grantee from post-transfer difficulties are included in the deed’s future covenants. These might include a third party claiming superior title to the property to the grantor, or a fault in the title.
If the grantor’s guarantees of clear title include the full history of the property’s ownership, the warranty deed is known as a General Warranty Deed. When the time period covered by the guarantee is restricted, a Special Warranty Deed is often employed.
What is covered by a Special Warranty Deed?
The Special Warranty Deed, like the General Warranty Deed, contains current and future covenants that ensure the grantor’s clear title to the property and the right to transfer it, as well as bind the grantor to defend the grantee’s title following the transfer.
The primary distinction between a General Warranty Deed and a Special Warranty Deed is that the Special Warranty Deed provides a more time-limited clear title assurance. In contrast to a General Warranty Deed, which promises to the grantee that the grantor’s title to the property is clear all the way back to the original deed, a Special Warranty Deed only promises clear title against claims that arise after the grantor acquired title.
Thus, if the grantor of a Special Warranty Deed possessed a defective or disputed title interest, and that defect or dispute became apparent to the Special Warranty Deed grantee after the transfer, the grantor would be under no obligation to assist the grantee in repairing the defect or resolving the dispute.
Is using a Quitclaim Deed to transfer property safe?
A deed’s primary function is to transfer title ownership interest in real property from one person to another, however a Quitclaim Deed does not transmit an interest from the grantor to the grantee. It instead represents the grantor’s renunciation of a claimed title interest in the property.
Because a Quitclaim Deed does not transfer a title interest but merely relinquishes a claimed interest, utilizing one to transfer property might expose the recipient to hazards. For example, if a grantor’s abandoned claim of title is invalid, the grantor is under no duty to assist the grantee if a challenge is filed. If you buy property using a Quitclaim Deed and someone subsequently contests your title to the property, the Quitclaim Deed may be worthless.
Quitclaim Deeds are often utilized in the settling of disputes. For example, if two persons disagree over who owns a property, a settlement agreement might require one of them to transfer a Quitclaim Deed to the other, renouncing that person’s title claim and leaving the other with clear title. Alternatively, if a married couple owns a house jointly but one spouse divorces, the leaving spouse may sign a Quitclaim Deed as part of a Divorce Settlement Agreement.
When would I need a Bargain and Sale Deed?
A Bargain and Sale Deed, unlike General Warranty Deeds and Special Warranty Deeds, does not ensure that the grantor has clear title to the property dating back at least to when the grantor bought it. Bargain and Sale Deeds are unusual in typical real estate deals, particularly of residential residences. If you are acquiring a house via foreclosure, you are more likely to come across one. In this situation, the grantor is often a city, county, or bank.
A Bargain and Sale Deed is similar to a Quitclaim Deed in that both documents might potentially convey a claimed title that does not exist or may be challenged. The distinction between the two is that in a Bargain and Sale Deed, the grantor sells the property, but in a Quitclaim Deed, the grantor relinquishes his or her claimed title interest in the property.
The most essential point to know about Bargain and Sale Deeds is that if the grantee has title-related difficulties with the property after gaining title, the grantor is under no duty to assist in resolving the issue.
What distinguishes a Grant Deed from other types of deeds?
Consider a Grant Deed to be a scaled-down version of a Warranty Deed or a Special Warranty Deed. A Grant Deed, like these other deed types, assures the grantor has clear title to the land and undertakes not to have sold the property to anybody other than the grantee. What a Grant Deed does not guarantee is that the grantor would protect the grantee’s title interest in the property if complications develop after the transfer.
Grant Deeds are often used in real estate transactions that do not include mortgage financing, as well as when transferring property as a gift, to a trust, or to a corporation.
Is it possible for me to create my own Grant Deed?
You may create your own Grant Deed. A lawyer is not necessary to draft a legally binding document. If your deed satisfies the standards of the state in where the property is situated, it is regarded legal proof of title transfer.
A Grant Deed needs the same fundamental information as any other deed, such as the names of the grantor and grantee, as well as a description of the property being transferred by the grantor. Furthermore, Grant Deeds must include the grantor’s dated and witnessed signature, as well as at least the grantor’s promise of clear title and the authority to transfer it.
