Most real estate transactions use various property deeds to transfer title from the grantor (the previous owner) to the grantee (the new owner). The type of deed used will depend on the type of title warranties and covenants that the grantor provides. Here are a few of the most common forms of property deeds to give you a better idea of what to expect in a real estate transaction:
General Warranty Deed
This type of deed gives the buyer the highest amount of protection. It certifies that the property’s title is clear and the grantor is the true and rightful owner of the property. Essentially, the grantor reassures the grantee with a promise to protect them from any entities that have a lien or claim on the property. A general warranty deed is granted after one’s title insurance company does a title search. After that, the title insurance agency will allow the grantee to buy an insurance policy for further protection from any issues with the title.
Special Warranty Deed
The special warranty deed doesn’t offer the grantee as great protection as a general warranty deed does. This form of property deed will only address any issues with the title that were uncovered during the grantor’s ownership of the home. Basically, the grantor warrants that they have not done anything while holding title to the property that would cause issues. It does not provide a warranty against any problems that existed before the grantor’s ownership of the home.
A quitclaim deed, or a non-warranty deed, is a form of property deed offering the least amount of protection. The grantor doesn’t make any promises regarding the transfer of clear and free title. So, if there are issues with the title, the grantee will not have any legal recourse against the grantor. Under what circumstances would this deed ever be used, you ask? It is most commonly used when the grantor is unsure of the quality of the title or if they wish not to have any liability. This can also be used when a grantor wants to add someone close to them (i.e., a family member or friend) to the property title or remove them from the title.
Bargain and Sale Deed
Finally, the bargain and sale deed is very similar to a quitclaim deed; however, it offers the grantee reassurance that the grantor is the rightful owner of the property and is at liberty to sell it. This form of deed is often used during foreclosures or court seizures. The grantor will not always be protected by title insurance for this form of a deed, which could put them at risk for a claim or lien on the property.
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