In yesteryear, people transferred ownership of real property with a ceremonial act (called “livery of seisin") in which the person transferring the land hands a tree branch or some dirt from the property to the new owner. Today, title to real property is conveyed with a property deed, a legal document that passes property ownership from a seller (called the grantor) to a buyer (called a grantee).
While filling out a deed form isn't a difficult feat, selecting the appropriate deed for the transfer can be more complicated. There are different types of deeds offering different promises, from general warranty deeds (with the highest level of protection for the buyer) to quitclaim deeds (providing the least protection). Anyone can attempt to figure this out for himself, but the covenants are usually couched in legal terms, and it may be better to get expert advice.
General Warranty Deeds
The deed most commonly used to transfer residential real property in the U.S. is the general warranty deed. If the owner is selling to a third party stranger, as is often the case, the buyer will likely insist on a warranty deed. Any grantor signing this type of deed makes a series of binding promises called covenants to the buyer, including:
- the covenant of seisin, under which the grantor promises that she owns the property and has the right to convey it;
- the covenant against encumbrances, under which the grantor guarantees that the real property doesn't have any liens or encumbrances other than those mentioned in the deed; and
- the covenant of quiet enjoyment, under which the grantor agrees to defend the grantee's title against anyone claiming under it from any point in the past.
Obviously, before a grantor signs over title to property with a general warranty deed, she will want to be sure that all of these covenants are true and that the property is free of any additional encumbrances, liens and competing claims of ownership. A real estate agent can help get a title search to be sure this is true, along with title insurance, to back up the warranties. The purchase price will need to be sufficient to pay all mortgages, tax liens, judgment liens and other encumbrances; otherwise, the seller will need to put in money to make up the difference before good title will pass.
Special Warranty Deed
The special warranty deed is also known as a grant deed, resembling the general warranty deed in most ways. However, instead of agreeing to protect the grantee against any title defects from any point in the past, the grantor agrees only to protect the grantee from any debts on the property or title problems arising during the time the grantor owned the property. This deed is often used for sales of commercial property.
The Quitclaim Deed
Quitclaim deeds fall at the far end of the spectrum. They do not contain any promises about title, encumbrances or ownership. That is, the seller does not even promise that he owns the property he is conveying, much less agree to protect the grantee from any title defects.
Under a quitclaim deed, the grantee takes whatever interest the grantor might have in the property; no more, no less. These deeds are very useful for transferring real property between family members, but a buyer who is a stranger to the seller will usually not accept a quitclaim deed.
Prepare and File the Deed
Generally, real estate professionals assist a seller in determining which deed to offer, preparing and filing it with the appropriate office. If the seller wishes to do these steps herself, she can obtain the appropriate deed form at an office supply store, and fill in the names of the seller and buyer as well as a legal description of the real property, available from the register of deeds office.
The seller signs the completed deed before a notary, and the buyer records it in the property deed office or county clerk's office. Most states charge a fee to file a real property deed and another fee to provide a filed copy of the deed.