If you’re looking for your perfect starter home – or the perfect plot of land to build it on – then you’ll likely soon receive one of several different types of deeds. Unless you are unusually well-versed in property law terminology, it’s understandable that you might not know the difference between, say, a quitclaim deed and a special warranty deed. But before you sign your contract, it’s good to know exactly what you’re getting with each type of deed.
General warranty deed
This type of deed is the safest for you, the buyer, because it offers you the most protections. A general warranty deed guarantees the legitimacy of the property’s title and protects you from any problems with the title all the way back to the beginning. If at all possible, you want to make sure the seller gives you one of these deeds.
Special warranty deed
These are the next safest type of deed. Special warranty deeds guarantee the health and legitimacy of the title, but only for the time that the seller has owned this property – not for when the people before them owned it. Thus, there could still conceivably be title problems that arise from many years ago that you might have to end up dealing with.
Quitclaim deed
This is the type of deed that you probably don’t want to sign unless you have no other options, or unless you’ve really done your homework on the property’s title history. Quitclaim deeds don’t offer the buyer any protection – they simply transfer title to the buyer “as is.”
This means that, if you sign a quitclaim deed, and later find out that there is a lien on the property, a wild deed or some other problem that arises down the road, you might have to go to court to defend your rights to the property.
There are many more types of deeds that you could run into. These three are the most common, and the most important to know, before you decide to take steps to finalize the purchase of your new dream home.
