How do deeds play a role in a real estate deal?
Deeds are legal documents that transfer the ownership of an asset
(in this case, property) from one person to another.
It will usually contain the names of the old and new owners
and a legal description of the property, and is signed by the
person transferring the property.
You can't transfer real estate without having something in writing,
which is almost always a deed.
There are four types of deeds commonly used in real estate to convey title…
- General Warranty Deed
- Specialty Warranty Deed
- Bargain and Sale
Quit Claim
General Warranty Deed
- Most commonly used in residential real estate sales
- Clearly promises the buyer that the transferor has good title to the property.
- Free of liens or claims of ownership
- That the seller is legally allowed to sell the property
Specialty Warranty Deed
- Does not cover entire properties history
- Only covers the history during the current sellers ownership
- Commonly used in commercial transactions
- Can also be used in residential
Bargain and Sale
- Grants title without Warranties
- Commonly used in residential or sales of court-seized properties (foreclosures)
- A deed that contains only the name of the seller, the name of the buyer, a recital of consideration, a description of the property, and words of conveyance
- A bargain and sale deed does not ensure that the seller has the right to sell the property
Quit Claim
- Used when there is a “cloud” on title
- Used to remove apparent defects in title without the time and expense of litigation.
- Helps transfer remaining interest of any person who still has claim
- Commonly used in divorces
- No warranties of title at all
In conclusion, real estate deeds are all about liability and understanding how the rights to real estate are being LEGALLY handled. Just remember your DUE DILIGENCE, do the research, and you'll greatly decrease your chances of deed issues.
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