All About Deeds

With a sharp increase in short sale, foreclosure and bank-owned property sales today, the transfer of title (ownership) in real estate from seller to buyer is less likely to be conveyed through the traditional Warranty deed and more likely to be conveyed through one of three other types of statutory deeds.

In the transfer of ownership from seller to buyer, there are varying levels of protection among the four types of statutory deeds. Starting with the deed that offers the most covenants and warranties and ending with the deed that offers the fewest covenants and warranties, the four types of statutory deeds are:

Warranty The seller forever covenants and warrants the title and provides every possible future guarantee to protect the buyer’s title. With a warranty deed, the seller is the rightful owner and has the right to transfer title; there are no outstanding claims on the property from lenders or other creditors using the property as collateral; and the property cannot be claimed by another party. This type of deed is commonly used in a traditional arms-length transaction between Joe Seller and Joe Buyer.

Bargain & Sale The seller does not covenant or warrant to defend the title against any future claim or attack. This type of deed is sufficient to convey all the title the seller has, but does little to protect the buyer from clouds or claims on the title. This type of deed is commonly used by court officials for property that has been seized from the property owner and held by force of law by the authorities.

Special Warranty The seller does not covenant or warrant the title in any manner except against acts by the seller or the seller’s rep. The seller guarantees that nothing has been done to encumber or cloud the title during their ownership. This type of deed is commonly used by major corporations in the sale of property.

Quitclaim The seller makes no covenants or warranties about the quality or extent of the title being conveyed. The seller does not warrant to defend the title or to transfer a valid interest. The buyer has no legal recourse if title problems surface at a later date or if a forgotten lien holder emerges from the woodwork. This type of deed is commonly used when a property owner dies and bequeaths their property to someone; when a property owner gets married/divorced and adds/removes the spouse's name to/from the title; or when property is transferred to a living trust.