Transferring Property: The Three Types Of Real Estate DeedsShare
If you are transferring a real estate property to a relative rather than selling it through a real estate agent, you have many options and likely need real estate legal services. During a typical property purchase, a general warranty deed is used to transfer ownership of the property. However, passing a property to a relative can be done with several types of deeds. If you are curious about your options, this article covers three types of deeds that may be used in this type of real estate transaction.
General Warranty Deeds
General warranty deeds are considered the safest deeds for property buyers. These deeds come with a guarantee that there are no outstanding liens, creditor claims, or defects on the title of the property being transferred. If there are any liens or claims to the property, the responsibility for those claims would fall back on the seller, not on the buyer. For this reason, general warranty deeds are commonly used when buying a property from someone unknown to the buyer. They can also be used for any real estate property transfer, and a real estate lawyer may recommend using a general warranty deed even in a transaction between friends of family members.
Special Warranty Deeds
The next step down in terms of protection, special warranty deeds offer some protection to property buyers. These deeds guarantee that the title of the property doesn't have any liens, creditor claims, or other defects put on it during the seller's ownership of the property. They don't guarantee that there were no defects or claims made on a property before then. Because the distant past isn't factored into the guarantee on special warranty deeds, the seller is more protected than the buyer. The buyer is still protected from a dishonest seller, but not from long-forgotten defects on the title. If old defects are brought up against the title at a later date, the responsibility to handle them is passed onto the buyer.
Quitclaim deeds are considered risky by some legal professionals. They offer no guarantee against liens, creditor claims, or defects in the title. What these deeds do offer, however, is simplicity. They are considered the fastest way to transfer real estate properties. Because quitclaim deeds don't protect buyers at all, they are typically only used between buyers and sellers who know and trust each other. A real estate lawyer can help you determine if the benefits of a quitclaim deed outweigh the potential risks of the transaction.
To learn more about transferring property, contact a real estate law firm in your area.