State Line Properties

Real Estate 101

Types of Deeds

Deeds Convey Property in Different Ways

Whether you are selling your home, bequeathing it to a child, or taking sole ownership after

divorce, the property must be transferred. The process by which this is accomplished is called

deeding. But not all deeds are created equal. Read on for a quick primer on the difference

between a warranty deed and a quitclaim deed, the two most common conveyances.

Warranty deed

A warranty deed is what people typically think of when selling a property. It is a piece of paper

that has been signed by the property owner and recipient. It essentially states that the former

has no outstanding liens or claims against the property that would encumber the latter’s

purchase or future rights of ownership. Bankrate notes that title insurance, which is required in

most traditional real estate sales transactions, protects the buyer from false information given on

the warranty deed. A warranty deed may be written as a special warranty deed, which warrants

only the history of the property from the time the current titleholder acquired ownership; a

regular warranty deed guarantees a free and clear title in reverse perpetuity.

Quitclaim deed

A quitclaim deed comes into play when the property being transferred is done so without

compensation. For example, your grandfather dies and leaves his home to you. You are not

buying the property but inheriting it. A quitclaim deed would be issued. A quitclaim does not

warranty against liens against the property. This type of deed is issued under the assumption of

an existing relationship between giver and recipient and the recipient trusts that the giver

actually, holds an interest in the subject property. Quitclaim deeds are useful during divorce

proceedings as they are usually executed much faster and are less expensive than warranty

deeds. It is important to note that a quitclaim deed only transfers interest of a property and does

not release any party from financial liability relating to the property, according to SFGate. Filing for a quitclaim deed

Unlike a warranty deed, a quitclaim deed doesn’t take considerable time or research related to

the history of the home/property. Redfin explains that quitclaim deed requirements are,

however, different from state to state and suggests consulting with an attorney prior to obtaining

the necessary forms.

Deed and title

Deeds and titles are not the same thing, although one cannot exist without the other. A deed is

a legal document; a title refers to the legal rights a person has over property being transferred

via deed. An easy way to compare the two is by thinking of a deed as a marriage license. It’s a

piece of paper that says two people intend to marry and may legally do so; the title is the state

of being wed and is more of an abstract concept, just as you cannot see a marriage. The

marriage (title) exists because the license (deed) says neither party is incapable of the act due

to an existing marriage (lien).

Other types of deed

While warranty and quitclaim are most used, there are a number of other types of deed. These

include bargain and sale, similar to a quitclaim but involves the transfer of money and is often

associated with seized properties; grant, guarantees property is free of debts but not defects;

and court-order deed, a deed created without consent of the owner, often when they are

incapable of paying for the property.

When buying a home on the market, a warranty deed is always the way to go. Special

circumstances, such as divorce, may be best suited to a quitclaim deed, especially when the

property was acquired during the marriage. Either way, a deed transfers title but only a warranty

deed ensures that title won’t be compromised due to past defects.

Real Estate 101

A Typical Real Estate Transaction in a Nut Shell

You describe to us specifically what you are looking for, including the price range and location preferences if any.
If you see something you like give us a call, we can then arrange a time with you to show the property.
Once you decide on a property to purchase make sure to have all your financial arrangements in order before making the offer. We will then take your written or verbal offer to the seller. The seller will either accept your offer or make a counter offer. If the seller makes a counter offer you can either accept their offer or counter back with a different purchase amount.
If the seller agrees to the terms of your offer, we will draft a purchase agreement contract, at which point both seller and buyer are under a legally binding contract, with the contract to close at some point in the future – usually 30 days.
The buyer typically places earnest money (a sum of money in escrow to indicate to the seller that said buyer is a serious buyer). The seller is legally entitled to this earnest money as liquidated damages in the event a buyer pulls out of a contract without justification. If, however, the buyer justifiably pulls out of the contract, the buyer is legally entitled to their money back.
During the 30 days between the time the contract is signed and the closing, we would have a title investigation done to verify the following things: a) whether the seller has legal authority to convey the property, b) identify any outstanding mortgages, city/ county liens that the seller needs to satisfy before conveying, c) identify any potential legal judgments against the seller that may affect title to the property they are attempting to convey. The goal of the title search is to ensure that the new owner will have clear and marketable title, and that no one can stake any claim or interest on your property once the transaction is closed.
At closing, you, as the buyer will be furnished with a final title policy that insures the title to your property, the original, executed, recorded warranty deed, and a closing/ lien affidavit, all of which legally transfers fee simple ownership from the prior owner to you the new buyer. Of course, at closing, you will be expected to bring all funds required to complete the transaction. Make sure to have homeowner’s insurance and all utilities in your name on the day of closing. You will want to make sure to have all this arranged before the closing date occurs. That’s about it for the real estate transaction. Enjoy your new home!!