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Which Property Deed is Needed - Quitclaim Deed or Warranty Deed?

There are generally three or four types of deeds (depending upon your state) that are used to assign ownership of real property, and/or to transfer title to the land. Each deed is basically used for one thing - to transfer the interest of the grantor (person selling the house) to the grantee (person who is buying the house). Please take note: each deed comes with different levels of effectiveness and warranties (guarantees). Always check with your state and/or local attorney to be sure you are utilizing the appropriate deed for your situation.

General Warranty Deed – very commonly used in the Midwest and Eastern states, but accepted nationwide.

As a buyer, you definitely prefer to have this deed. The General Warranty Deed is the one most commonly used. It also is the one that carries the greatest protection with it. The main advantage this deed has is that the grantor is agreeing to pay damages if the title fails at any time in the future. The grantor is giving a warranty (guarantee) to you that the title is clear of any “encumbrances” (liens, taxes, assessments, etc.), and that he has not given any rights, title, or interest of the property to anyone else but you.

Special Warranty Deed

Most sellers would prefer this deed. The Special Warranty deed places limits on the grantors warranty about the property. With this deed, the grantor claims the title “by, through, or under him, but not otherwise.” It relieves the grantor from any liability of claims against the title that did not come through him. He is only guaranteeing that he himself, has not personally done anything to affect the title during the time that he has had it.

Deed Without Warranty – widely recognized in the state of Texas

This deed falls in between the Quitclaim Deed and the Warranty Deed. It still uses the particular “language” that the warranty deed does to establish title, but it carries no warranty (quitclaim deed does not establish title). Title companies will usually not insure with this type of deed.

Quitclaim Deed – often misnamed as quick claim deed

This deed carries the lowest level of protection to the buyer. The Quitclaim Deed transfers only someone’s interest in real property. It simply just says that IF that person had any interest in the property, that they sign it over to you. They may not necessarily own the property being sold, but they hold responsibility for it. It does not establish title. The grantor might be on the title, or may have never been identified on that deed. He is only passing on his interest that he was granted in the property. He does not claim that the title is valid. He is not held responsible if any title defects are eventually found. Quitclaim Deeds are best used when the property will just stay within a family. Most often they are used to just get the other person’s name off of the title.

Special note: A quitclaim will not release you from your obligation to any mortgage loan, or other lien secured against the property. Refinancing is the best means to achieve this. The grantee must refinance the property using their own income, assets and credit, and they cannot use your income, assets or credit to get the financing approved.

Title companies will not usually insure with a quitclaim deed.

Grant Deed – most commonly used in the state of California

The Grant Deed is very similar to the Warranty Deed. The main difference between the two is the number of guarantees contained within them. A Grant Deed has two, and the Warranty Deed has three. The third one in the Warranty Deed that makes the difference: The grantor guarantees that if the title ever fails he or she will compensate the grantee (new owner) for any losses.

Another important note about Grant deeds, is that they don’t need to be recorded to be valid, nor do they need to be notarized to be valid.

The other types of deeds, of course need to be recorded and notarized.

Barbara Partaka
Home-Buddies