Property buyers and investors, as well as their agents and attorneys, must carefully examine the deed presented at closing and being used to convey the property. Even before the closing, the buyer's attorney should negotiate to have the best type of deed, at least from the buyer's point of view.
Different types of deeds offer varying levels of protection and assurances to the grantee. There are five common types of deeds used in most real estate transactions:
1. General warranty deed. This deed offers the grantee or buyer the greatest amount of protection, because the grantor must make several guarantees about the property.
2. Special warranty deed. Also called a limited warranty deed, this deed does not provide all of the guarantees of a general warranty deed.
3. Quitclaim deed. This deed offers the grantee no guarantees about the title and property. All it does is convey any interests that the grantor may have.
4. Bargain and sale deed. This type of deed has slightly more protection than the quitclaim. The bargain and sale deed normally indicates that the grantor actually has the power to convey the title. Other guarantees may be added, but not required.
5. Grant deed. Similar to the special warranty deed, the grant deed only covers the actions of the grantor (current owner) and makes no promises about previous owners.
All of the preceding five common deeds will be discussed in greater detail later in this article. Meanwhile, in addition to the above, many states use special purpose deeds to handle certain transactions:
Administrator's deed. This type of deed is used by the court appointed administrator who is charged with disposing the remaining assets of a person who has died without a will to convey the title of the deceased person's real property to a purchaser, heir or other party.
Deed in lieu of foreclosure. When mortgage loan borrowers have defaulted on their loan and have no practical hope of recovering, they can avoid the further cost and demands of foreclosure proceedings by surrendering their property to the lender. The title to the real property is then conveyed through this deed. For more information, see the "What You Should Know About Foreclosure" article.
Deed in trust. When establishing a land trust, this deed is used to establish the land trust and convey the property ownership to the trustee.
Executor's deed. This type of deed is used by the executor — who is appointed by the will of the deceased person, to administer the terms of the will to convey the title of the deceased person's real property to a purchaser, heir or devisee.
Gift deed. When giving or donating property without expectation of any repayment or consideration, the gift deed may be used in some states. Guardian's deed. This type of deed is used by the court appointed guardian who is charged with administering the assets of someone legally incompetent (because of age, senility or the like) to convey the title of the incompetent person's property to a purchaser or other party.
Referee's deed. In many states and localities, the referee's deed is used to convey title sold during a foreclosure sale.
Release deed. Also called a deed of release, the release deed is used to remove liens and claims currently recorded against the property. This is primarily used to remove a trust deed. The lender will issue the release deed when the outstanding loan has been satisfied.
Sheriff's deed. In many states and localities, the sheriff's deed is used to convey title sold during a sheriff's sale or an auction of a property, ordered by the court, to satisfy a judgment.
Tax deed. When title to the property is sold by the court to satisfy unpaid delinquent taxes (usually real estate), the tax deed is used to convey the property's title to the purchaser.
Trust deed. Also called a deed of trust, this instrument is sometimes used instead of a typical mortgage note to secure a mortgage loan.
Trustee's deed. When removing title from a trust, the trustee will often use the trustee's deed to convey title out of the trust.
In next articles we will look deep to all these deeds listed above. Note from editor. As you see there are provided some basic aknowlegments about mortgage and real estate. May be you know all this things, but it will be interesting even for prefessionals in real estate. All this information provided from real estate finansist point of view, but for individual home buyers or home sellers it is good too.