When it comes to real estate transactions in , there are several types of deeds that you may encounter during the process. A deed is a legal document used to transfer ownership of a property from one party to another. Understanding the different types of deeds is crucial for any real estate transaction, whether you are buying or selling property in . In this blog post, we’ll discuss six common types of deeds you’re likely to encounter in real estate.
1. General Warranty Deed
A general warranty deed is the most common type of deed used in real estate transactions. This type of deed provides the buyer with the highest level of protection against any claims or liens against the property. With a general warranty deed, the seller guarantees that they have clear title to the property and that there are no outstanding liens or claims against it. This is the most common type of deed and offers the greatest protection to buyers.
2. Special Warranty Deed
A special warranty deed is similar to a general warranty deed, but it provides less protection to the buyer. With a special warranty deed, the seller guarantees that they have clear title to the property, but only for the time that they owned it. This means that the seller is not responsible for any claims or liens that existed before they owned the property.
Here are some key features of a Special Warranty Deed:
- Limited Warranty: Unlike a General Warranty Deed, where the seller warrants against all claims to the property’s title, a Special Warranty Deed only provides warranties for the period during which the seller owned the property. This means that the seller guarantees that they haven’t done anything to impair the title during their ownership, but they don’t warrant against any defects or claims that existed before they acquired the property.
- Defend Title: The seller promises to defend the buyer against any claims to the title that arise during their ownership of the property. If someone makes a claim against the property based on an event or issue that occurred while the seller owned it, the seller is responsible for defending the buyer’s title.
- Limited Protection: Because the warranties in a Special Warranty Deed are narrower than those in a General Warranty Deed, the buyer may have less protection against potential title issues that arose before the seller’s ownership. It’s essential for buyers to conduct thorough due diligence, such as title searches and inspections, to identify any existing problems with the property.
- Common Usage: Special Warranty Deeds are commonly used in commercial real estate transactions, especially when properties are sold by businesses or investors. They are also sometimes used in residential transactions, particularly in cases where the seller wants to limit their liability for past title issues.
- Recording Requirements: Like other types of deeds, a Special Warranty Deed must be properly executed, notarized, and recorded in the county where the property is located to be legally valid. Recording the deed provides public notice of the property transfer and helps protect the buyer’s interests.
3. Quitclaim Deed
A quitclaim deed is a type of deed that transfers any interest the seller has in the property to the buyer. This type of deed does not provide any guarantees or warranties regarding the title to the property. With a quitclaim deed, the seller is simply transferring any interest they have in the property to the buyer. It’s important to speak with your lawyer and understand all legal aspects of buying a property with a quitclaim deed.
4. Sheriff’s Deed
A sheriff’s deed is a type of deed that is used in cases where a property was foreclosed on. This type of deed transfers ownership of the property from the previous owner to the buyer. Because the property was foreclosed on, there may be outstanding liens or claims against the property, so it’s essential to conduct a thorough title search before purchasing a property with a sheriff’s deed.
5. Trustee’s Deed
A trustee’s deed is a type of deed used in cases where the property is held in a trust. This type of deed transfers ownership of the property from the trustee to the buyer. Because the property is held in a trust, there may be specific requirements or restrictions on the sale of the property, so it’s essential to consult with an attorney before purchasing a property with a trustee’s deed.
6. Tax Deed
A tax deed is a type of deed used in cases where the property was sold to pay outstanding property taxes. This type of deed transfers ownership of the property from the previous owner to the buyer. Because the property was sold to pay outstanding taxes, there may be outstanding liens or claims against the property, so it’s essential to conduct a thorough title search before purchasing a property with a tax deed.
Understanding the different types of deeds is crucial for any real estate transaction in . Whether you’re a buyer or a seller, it’s important to know which type of deed is being used and what protections it provides. By working with a knowledgeable real estate professional and conducting a thorough title search, you can ensure a smooth and successful real estate transaction. Are you buying or selling a property in ? Reach out to our team today to find out how we can help! 919-629-1140