Here's a closer look at each.
General warranty deeds
General warranty deeds are the best for grantees since they offer the most buyer protection. They guarantee a clear title with no encumbrances.
Of course, these deeds give grantors the greatest degree of liability. That's because the grantor is legally bound by certain covenants and warranties (promises), including:
- The covenant of seisin and the right to convey. Guarantees the grantor owns the property and has the legal right to convey it.
- The covenant against encumbrances. Guarantees the property is free of liens and encumbrances, except as stated in the deed.
- The covenant of quiet enjoyment. Guarantees a clear title with no third-party claims against it.
- The covenant of warranty forever. Guarantees that if the title fails at any time in the future, the grantor will compensate the grantee for any losses. The grantee should still get title insurance because the grantor may be dead or insolvent at the time of a future claim.
Special warranty deeds
A special warranty deed (also called a limited warranty deed) carries just two covenants. The grantor warrants only that:
- They received title to the property back when they purchased it, and
- The property wasn't encumbered during the time they held title.
In general, special warranty deeds include "remise, release, alienate, and convey" in the granting clause. If other warranties are included, they must be specially stated in the deed.
Bargain and sale deeds
A bargain and sale deed offers less protection than a special warranty deed. While it implies that the grantor holds title, it doesn't guarantee the title is free of defects. Also, it offers no guarantees that the property is free of encumbrances.
These are most often used in tax sales and foreclosure auctions. That's because the grantor (usually a bank or tax authority), may be unaware of any encumbrances since they didn't occupy the property. Rather than accept that risk, the bank transfers the property with no guarantees about encumbrances.
Quitclaim deeds offer the least buyer protection. They convey whatever interest the grantor has in the property -- if any -- when the deed is executed.
With a quitclaim deed, the grantor "remises, releases, and quitclaims" their interest in the property and makes no promises about the quality of the title. There's no guarantee the grantor owns the property or has any rights to transfer it.
With no warranties, a grantee has little to no recourse if there's a problem with the title. As a result, quitclaim deeds are best for low-risk transactions, including those that don’t involve any money. They’re typically used to transfer title between family members, to add a new spouse to the title following marriage, or to remove a former spouse after divorce.
Quitclaim deeds are also used to cure a title defect, or a "cloud" on the title. A cloud is is anything that puts the title into question, such as a claim, unreleased lien, or encumbrance. For example, if the name of the grantee is misspelled on a warranty deed, a quitclaim deed with the correct spelling can be executed to perfect the title.
Know your deeds
The various property deeds offer different levels of buyer protection. Before closing on a real estate deal, be sure you understand the type of deed that you'll use.
In most states, the deed must be recorded in the appropriate government office in your county. In general, deeds are recorded sometime between two weeks and a few months after closing.
Keep in mind that the grantee named on the last deed of record is recognized as the legal owner. Therefore, if your deed didn't get recorded -- for whatever reason -- you could run into trouble if you try to sell or refinance. It's always a good idea to confirm that your deed has been recorded. To find out, check with your real estate attorney, the escrow agent, or the county clerk's office.