Good Deeds! Get the Porsche of Deeds Fully Loaded w Premium Package of Seller Promises!
Good Deeds prove property ownership! If you buy property, you want a good deed with a Premium Package of Seller Promises (covenants). Deeds of lesser quality provide limited protections, if any, to a Buyer (new owner). Many Lenders only lend funds if you have a good quality deed with all the promises. For this reason make sure your purchase and sale contract specifies the deed type you will receive!
General Warranty Deeds are the Best, Special Warranty Deeds are mid-point and Quit Claim deeds are the lowest quality.
A General Warranty Deed is the best Type of Deed! It’s the Porsche or Maserati of Deeds because it is fully loaded with the “premium package” of covenants (promises) the Grantor (Seller) makes to the Buyer. This package includes Seller’s promises that, the: (1) Seller owns the property and has the right to sell it; (2) Property is free from liens or other encumbrances, except as noted in the Deed; (3) Seller gives the Buyer good title to the property; (4) Seller will sign and deliver any legal instrument (document) that may be required to make the title good in the future; and (5) Seller will forever warrant and defend the Buyer’s title against all lawful claims
A Quit Claim Deed is the lowest quality Deed. It’s the Lemon or Jaloppy of Deeds, it does not have a “promise package.” The Seller only promises to transfer the interest it has in the property, if any, to you. The Seller doesn’t promise it owns the property, has an interest in the property or has a right to sell it! This means, someone could give you a Quit Claim Deed to the Brooklyn Bridge! Some people use a “Quit Claim Deed” because they think it is “Quick” way to transfer title between related parties. It may be “Quick” but it may cause title problems for the new owner because it does not include the promise package and the previous title policy may not cover the new owner. Be careful when using a Quit Claim Deed.
Special Warranty Deed is another type of Deed. Like a General Warranty Deed it includes Seller promises but does not include the “premium package.” The Special Warranty Deed’s package of promises is weaker because the time period for the covenant against encumbrances is limited to the period of Grantor (Seller) ownership. The Seller only promises that the Seller created no undisclosed encumbrances during its ownership but does not make any promises about time periods before its ownership. This deed is often used by Sellers of foreclosed property who don’t want responsibility for the time they did not owner the property.
Make sure to check with your attorney to determine the type of deed that is best for your purchase.
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