A deed is a legal document that lays out the different aspects of a property and is used when transferring the ownership of a property from one person to another. There are many different types of deeds that have different purposes. Here is a list of the most common deeds.
This type of deed is used to provide conveyance and protection to those involved. This type of deed includes a warranty. This shows that the seller or the property does not have any debt and there is a right for the property to be sold. This requires the seller to compensate the buyer if there are any debts or problems not listed in the deed.
Special Warranty Deed
This deed is slightly different from the warranty deed. This special warranty only encompasses the time the property was owned by the current seller, not its entire history. This means the warrant only covers issues that may have occurred during their time of ownership, and not any issues that may have occurred before that. Typically, this type of deed is used with commercial properties or residential real estate.
Quit Claim Deed
This type of deed is usually used when the participants are in some sort of relationship with one another, whether they be family members, divorcing spouses, or friends. This type of deed allows for a simple transfer of property rights and claims to another party. Most of the time there is no money involved and there is no warranty or guarantee.
Bargain and Sale Deed
This type of deed typically involves real estate sales or court seized properties. This deed transfers ownership much like the quit claim deed, but instead there is a transfer of money. This usually shows the buyer that the seller does not fully own the property or that there may be other issues.
The grant deed transfers the property along with any interest. This interest is transferred from the seller for a previously agreed-upon price. This guarantees the property is being sold free of debt. It does not guarantee that the property is free of defects.
Court Order Deeds
There are a few different types of court order deeds. They include sheriff’s deeds, master deeds, or any other type of deed being created without the consent of the seller. Typically, they are in a situation where they can no longer pay for the house.
Whenever you are trying to understand a certain type of deed, it is important to also understand the different types of interest that may be owed to the person granting the deed. The type of interest being conveyed is usually shown through a Fee Simple Interest. Here are the general types of Fee Simple Interest.
Absolute Fee Simple Interest
This type of interest is exclusively owned by the seller. This gives the seller the sole power in selling the real estate.
Defeasible Fee Simple Interest
This interest is usually attached to the real estate and can be transferred or cancelled. This interest usually goes back to the original lending company. This type of interest does not give the seller the full right to sell the property until they pay the interest obligations or transfer it back to the lending company.
This type of interest is transferred with the property. It is included in the purchase contract, land contract, or lease agreement. This does not give the seller unrestricted power to sell the property, but still gives them the rights to sell or mortgage it.
Know Your Deeds
It is important when looking to purchase a property that you know all of the aspects involved in the deed. Determining which type of deed is going to be utilized, as well as the interest involved will help ensure a smooth purchase without surprises.