There are many different types of property deeds used to convey real property from a seller (grantor) to a buyer (grantee). Deeds include a granting clause that actually conveys the property and end with a habendum clause that describes the type of estate that is conveyed. Deeds are delineated by the types of warranty they include, if any.
The most common form of deed used to transfer property is the warranty deed. These deeds make certain assurances to the grantee that the title to the property is free of encumbrances, such as liens, up to a specific point in the history of the property's ownership. However, other types of deeds are sometimes used to convey property.
General Warranty Deeds
When a grantor gives a general warranty, he is essentially assuring the grantee that he will warrant and defend the title to the property against anyone who claims an interest in the property since it was first conveyed – even if such a claim arose before the grantor owned the property. This is the most desirable warranty deed to have if a grantee plans to get a loan from a bank or other lending institution.
Additionally, title insurance companies are more likely to insure property with a general warranty deed.
Read More: What is a Warranty Deed?
Special Warranty Deeds
A special guaranty deed also gives a grantee certain assurances that the grantor will defend the title to the property. However, a special warranty deed limits this guarantee to current or future claims made by other parties that arise during the grantor's ownership of the property – but not before that time.
To create a special warranty deed, it is necessary to add certain language to the deed: “by, through or under grantor (and not otherwise).”
Grant Deeds Which Offer No Warranties
A grant deed offers no warranties. It merely assures the grantee that the title to the property has not been conveyed to someone else and that it has no encumbrances that would prevent transfer of the property. Grant deeds are very simple documents that contain granting language and a description of the property.
When the grantor conveys real property to the grantee, their signatures are acknowledged by a notary public and filed in the county property records. Grant deeds are most often used in California, whereas the rest of the states tend to use warranty deeds as the instrument to convey property.
Quitclaim Deeds Which Do Not Convey Real Property
Quitclaim deeds really aren't deeds in that they do not convey real property. "Quitclaim" is a more apt term for this legal document. When a party signs a quitclaim, he is essentially divesting himself of all current and future interest in a piece of real property. Quitclaims are often used after a divorce, when the title to property that was held in both spouses' names is conveyed to one spouse.
Deed for Bargain and Sale
The riskiest form of instrument to convey real property is the bargain and sale deed. This deed is often used to convey property that is purchased at sheriff's sales and foreclosure auctions.
While the bargain and sale deed does indicate that the grantor is the legal titleholder to the property, it does not guarantee that the title to the property is clear – although if the property is purchased through a sheriff's sale or auction, information regarding any past due ad valorem taxes is made available to potential buyers. This deed is also referred to as a "bargain and sale without covenants."