A property deed is a legal document that is used to transfer the ownership of a property from one person to another. Most deeds have at least four things in common. A legal deed should indicate who the grantor is, which is the individual giving away the property rights, and it should identify who the grantee is, which is the individual receiving the rights. There also should be a description of the property and the deed should have a witness’ or notary’s signature validating that the grantor and grantee who signed the deed are who they say they are. However, there are different types of deeds. The five most common types of deeds are warranty deeds, quit claims deeds, sheriffs deeds, bargain and sales deeds, and grant deeds.
A warranty deed is the most protective type of deed that a buyer can receive. This document ensures that the seller or grantor is the rightful owner of the property and it guarantees that there are no liens or encumbrances associated with the property. Warranty deeds, in many states, come with covenants and there are four common types of covenants. The first covenant, the right of seisin, means that the seller promises that he or she has real title to the property. The second covenant is the right to convey, which means that the grantor not only owns the property but also has the right to transfer the ownership. The third covenant is against encumbrances to make sure there are no liens or mortgages on the property. The fifth is the covenant of further assurances. So, if an issue arises with one of the covenants, for instance if liens are discovered after the transfer of ownership, then the seller will have to assist the buyer and deal with the liens.
The second most common deed is a quit claim deed. With this type of deed, the seller does not guarantee that their title is valid. A quit claim deed is a type of transfer that doesn’t warranty any type of insurances from the grantor. It basically transfers the grantee any rights that the grantor has to the property and if the grantor doesn’t have any rights then the grantee does not receive any rights. A quit claim deed carries the least amount of insurances for the buyer which is a disadvantage because the buyer isn’t guaranteed to receive the property rights. That being said, this type of deed is usually used to change names on a deed or to correct a misspelling and there is usually no monetary exchange.
A sheriffs deed is often used by the government during a foreclosure. Typically this type of deed is used in a judicial state where the foreclosure has to go through the court system. Once the foreclosure process is complete, the sheriffs deed is given to the successful bidder. Although, sometimes a sheriffs deed comes with a right of redemption which means the person who was foreclosed upon has the right to pay to get the property back for a certain amount of time with added penalties.
A bargain & sale deed applies ownership like a warranty deed but does not guarantee the ownership. It is also similar to a quit claim deed but the property is sold rather than relinquished. It basically states that the grantor believes in good faith that they own the property and sell it to the grantee, but they don’t guarantee anything.
A grant deed is similar to a warranty deed but without the covenants. It is used by an individual with the understanding that they own a property, have the right to transfer their ownership to another person, and they don’t believe there are any liens or encumbrances on the property. Yet, they aren’t guaranteeing that; if an existing lien that was not known before were to come up after the ownership transfer than the grantor would not be liable for it.