If you are looking to buy or sell property, the transaction will involve a deed. Deeds are legal documents that transfer ownership from one landlord to another. They also include covenants and warranties that serve to protect the buyer in the event questions arise about the property.
Although all real estate transactions require a deed, these are not all the same. There are in fact different types of property and real estate deeds – each one designed for a specific purpose.
Depending on that purpose, a deed can be a brief one-page document, or it can include several pages of information. These are often prepared by an attorney and must be read and signed by all parties before it is legally binding. This article will examine the different types of property and real estate deeds and when they are used.
Understanding Deeds
The differences between deeds involve the covenants and warranties the grantor (the person or entity transferring the property) is offering the grantee (the person or entity receiving the property). However, all real estate deeds must contain the following four elements to be legal and valid:
- a written description of the property
- verbiage that states the grantor has the legal right to transfer the property
- verbiage showing the grantee has the legal right to receive the property
- the signatures of the grantor and grantee
Deeds fall into one of the following three categories: deeds with warranty, limited warranty deeds, and deeds of trust.
Deeds with Warranty
A warranty deed provides the greatest amount of protection to the grantee. This document "warrants" or pledges that the grantor owns the property free of liens, mortgages, or any other legal encumbrances.
There are several types of warranty deeds with their differences defined by the warranties the grantor conveys to the grantee.
General warranty deed
Although the exact wording can vary from state to state, a general warranty deed pledges that the grantor has the legal right to sell the property. It is the most common type of real estate deed.
A general warranty deed covers acts taken by all previous owners on the title. The seller promises that there are no liens against the property and to compensate the buyer if any claims should arise.
Grant deed
Another type of warranty deed is the grant deed. This legal document transfers interest in a property from the grantor (seller) to the grantee (buyer) in exchange for the agreed-upon price.
Although a grant deed pledges that the seller owns the property freely and clearly, it does not provide a guarantee against defects of title. A grant deed is commonly used for residential real estate sales.
Mortgage deed
A mortgage deed is a legal document that allows a lender to put a lien on the property until the loan is paid. Usually a one- or two-page document, the mortgage deed confirms that the property serves as collateral for the loan.
Read more: Differences Between Warranty and Quitclaim Deeds
Deeds Limited/No Warranty
A limited warranty deed is commonly used in commercial real estate transactions. While a warranty deed guarantees against all claims to the title, a limited warranty makes no guarantees about any claims that occurred before the seller owned the property.
Special warranty deed
By signing a special warranty deed, the grantor conveys only two warranties—that the grantor holds title to the property and that the property wasn't encumbered in any way during the time the grantor owned it. It doesn't guarantee the title was free before the grantor became the owner.
Bargain and sale deed
A bargain and sale deed offers the buyer no protection from liens or other encumbrances at all. This legal document states only that the grantor holds title to the property. Therefore, the grantee would have no legal recourse if title defects appear at a later date. As its name suggests, the bargain and sale deed is often used in tax sales, foreclosures, and other situations when the current owner doesn't know the legality of the property's history.
Quitclaim deed
A quitclaim deed provides the least amount of protection for the buyer, so its uses are limited. The grantor ends or "quits" any claim to the property, allowing the claim to transfer to the grantee. Since the quitclaim deed doesn't guarantee anything, it is typically used only when both parties have knowledge of a property's history, such as in a divorce settlement.
Get Your Quitclaim Deed
Deeds by Trust
Property can be conveyed from one owner to another via a trust. There are three different types of deeds by trusts in which the trustor (grantor) is the creator of the trust, the beneficiary (grantee) is the party benefiting from the trust, and the trustee is the individual or entity administering the trust for the trustor.
Deed of trust
A deed of trust (also called a deed in trust) conveys the title of a property from the trustor to the trustee for the benefit of the trustee. Some states allow a deed of trust to be used instead of a mortgage when the trustor transfers the deed to a trustee as a means of security for a loan from a lending institution.
Trustee deed
A trustee deed conveys the title to a party who is not the trustor -- usually the trust beneficiary. This deed must state that the document was executed according to the written terms of the trust.
Reconveyance deed
This type of deed is a document that conveys the title back to the trustor from the trustee. An example of when a reconveyance deed is used is when the trustor pays off a loan that was secured with the real estate as collateral.
Difference Between Deed and Title
Some people incorrectly use the real estate terms "deed' and "title" interchangeably. They refer to two related but different legal entities.
A title refers to the ownership and rights to use a property. A title may be a full or a partial interest in the property that allows you to access the land and potentially modify it. When you "hold title," you can legally transfer the portion you own to others.
On the other hand, a deed is a written legal document that transfers title from one person or entity to another. In most states, the local courthouse or assessor's office must record the deed in order for it to be fully binding.
However, a failure to file the deed does not invalidate the transfer; it just means that the deed is not perfected. A perfect title documents clear ownership for a smooth transfer of property.
Another way to look at the difference between the deed and the title refers to the rights of ownership, while the deed refers to the physical document prepared for a sale or transfer.
It's essential to know about the different types of deeds and the legality of each type so that you can make sure you have the correct document for your real estate transaction. If you are considering a quitclaim deed, you can create a legal contract quickly with our deed maker now.
If you are looking to buy or sell property, the transaction will involve a deed. Deeds are legal documents that transfer ownership from one landlord to another. They also include covenants and warranties that serve to protect the buyer in the event questions arise about the property.
Although all real estate transactions require a deed, these are not all the same. There are in fact different types of property and real estate deeds – each one designed for a specific purpose.
Depending on that purpose, a deed can be a brief one-page document, or it can include several pages of information. These are often prepared by an attorney and must be read and signed by all parties before it is legally binding. This article will examine the different types of property and real estate deeds and when they are used.
Understanding Deeds
The differences between deeds involve the covenants and warranties the grantor (the person or entity transferring the property) is offering the grantee (the person or entity receiving the property). However, all real estate deeds must contain the following four elements to be legal and valid:
- a written description of the property
- verbiage that states the grantor has the legal right to transfer the property
- verbiage showing the grantee has the legal right to receive the property
- the signatures of the grantor and grantee
Deeds fall into one of the following three categories: deeds with warranty, limited warranty deeds, and deeds of trust.
Deeds with Warranty
A warranty deed provides the greatest amount of protection to the grantee. This document "warrants" or pledges that the grantor owns the property free of liens, mortgages, or any other legal encumbrances.
There are several types of warranty deeds with their differences defined by the warranties the grantor conveys to the grantee.
General warranty deed
Although the exact wording can vary from state to state, a general warranty deed pledges that the grantor has the legal right to sell the property. It is the most common type of real estate deed.
A general warranty deed covers acts taken by all previous owners on the title. The seller promises that there are no liens against the property and to compensate the buyer if any claims should arise.
Grant deed
Another type of warranty deed is the grant deed. This legal document transfers interest in a property from the grantor (seller) to the grantee (buyer) in exchange for the agreed-upon price.
Although a grant deed pledges that the seller owns the property freely and clearly, it does not provide a guarantee against defects of title. A grant deed is commonly used for residential real estate sales.
Mortgage deed
A mortgage deed is a legal document that allows a lender to put a lien on the property until the loan is paid. Usually a one- or two-page document, the mortgage deed confirms that the property serves as collateral for the loan.
Read more: Differences Between Warranty and Quitclaim Deeds
Deeds Limited/No Warranty
A limited warranty deed is commonly used in commercial real estate transactions. While a warranty deed guarantees against all claims to the title, a limited warranty makes no guarantees about any claims that occurred before the seller owned the property.
Special warranty deed
By signing a special warranty deed, the grantor conveys only two warranties—that the grantor holds title to the property and that the property wasn't encumbered in any way during the time the grantor owned it. It doesn't guarantee the title was free before the grantor became the owner.
Bargain and sale deed
A bargain and sale deed offers the buyer no protection from liens or other encumbrances at all. This legal document states only that the grantor holds title to the property. Therefore, the grantee would have no legal recourse if title defects appear at a later date. As its name suggests, the bargain and sale deed is often used in tax sales, foreclosures, and other situations when the current owner doesn't know the legality of the property's history.
Quitclaim deed
A quitclaim deed provides the least amount of protection for the buyer, so its uses are limited. The grantor ends or "quits" any claim to the property, allowing the claim to transfer to the grantee. Since the quitclaim deed doesn't guarantee anything, it is typically used only when both parties have knowledge of a property's history, such as in a divorce settlement.
Get Your Quitclaim Deed
Deeds by Trust
Property can be conveyed from one owner to another via a trust. There are three different types of deeds by trusts in which the trustor (grantor) is the creator of the trust, the beneficiary (grantee) is the party benefiting from the trust, and the trustee is the individual or entity administering the trust for the trustor.
Deed of trust
A deed of trust (also called a deed in trust) conveys the title of a property from the trustor to the trustee for the benefit of the trustee. Some states allow a deed of trust to be used instead of a mortgage when the trustor transfers the deed to a trustee as a means of security for a loan from a lending institution.
Trustee deed
A trustee deed conveys the title to a party who is not the trustor -- usually the trust beneficiary. This deed must state that the document was executed according to the written terms of the trust.
Reconveyance deed
This type of deed is a document that conveys the title back to the trustor from the trustee. An example of when a reconveyance deed is used is when the trustor pays off a loan that was secured with the real estate as collateral.
Difference Between Deed and Title
Some people incorrectly use the real estate terms "deed' and "title" interchangeably. They refer to two related but different legal entities.
A title refers to the ownership and rights to use a property. A title may be a full or a partial interest in the property that allows you to access the land and potentially modify it. When you "hold title," you can legally transfer the portion you own to others.
On the other hand, a deed is a written legal document that transfers title from one person or entity to another. In most states, the local courthouse or assessor's office must record the deed in order for it to be fully binding.
However, a failure to file the deed does not invalidate the transfer; it just means that the deed is not perfected. A perfect title documents clear ownership for a smooth transfer of property.
Another way to look at the difference between the deed and the title refers to the rights of ownership, while the deed refers to the physical document prepared for a sale or transfer.
It's essential to know about the different types of deeds and the legality of each type so that you can make sure you have the correct document for your real estate transaction. If you are considering a quitclaim deed, you can create a legal contract quickly with our deed maker now.
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