6 Types of Deeds in Real Estate Explained

Deeds are legal documents used to transfer property in real estate transactions. In the most common types of deeds, the owner of a property acts as a grantor who transfers the title to their property to a grantee in exchange for money or some other form of consideration.

Most deeds are recorded in public records—including real estate deeds but also sheriff's deeds and tax deeds—and typically contain a description of the property and the current owner of the property. Individuals use these records to confirm ownership of residential and commercial property and governments use them to enforce property tax laws.

Buyers and sellers in the real estate industry commonly encounter six different types of deeds.

1. 1. Quitclaim deed: Quitclaim deeds—sometimes called quick claim deeds—are often used to transfer property among family members, to move properties into living trusts, and to remedy title errors. However, a quitclaim deed does not verify a grantor's ownership of the property, and in some cases (such as in clearing title errors), grantors knowingly deed property that is not theirs to sell. Quitclaim deeds also do not guarantee there are no title defects such as tax liens or easements. Since there are no legal protections against liens or encumbrances, quitclaim deeds involve a high degree of trust and are preferred by people who know each other well.
2. 2. General warranty deed: A general warranty deed is the most common type of deed used to transfer fee simple ownership of a property. Unlike a quitclaim deed, a general warranty deed does confirm a grantor's ownership and a legal right to sell. It also offers covenant against encumbrances (no tax liens or easements that can be claimed by neighbors), covenant of quiet enjoyment (assurance of good title that is superior to anyone else's title claims), covenant of further assurance (stating that the seller will take whatever steps are needed to clear title if needed), and covenant of warranty forever (assuring that these assurances will endure for as long as the homeowner owns the property). Most crucially, it offers a covenant of seisin, which means it guarantees that the full title is being transferred from grantor to grantee.
3. 3. Grant deed: A grant deed is also known as a special warranty deed or a limited warranty deed. It provides all the same protections and guarantees as a general warranty deed with one key difference: It only warrants the period during which the seller owned the property. If the buyer faced a title claim from someone who had a lien on the property under an earlier owner, the buyer would have to handle the matter on their own and would have no legal recourse against the seller. However, if the buyer purchased title insurance, the insurance policy would likely handle the cost of defending the title.
4. 4. Bargain and sale deed: A bargain and sale deed typically accompanies homes sold at foreclosure. This type of deed transfers title to the new owner, but it does not warrant against encumbrances. Homeowners who purchase a foreclosed home with a bargain and sale deed may encounter tax liens, problematic easements, or third-party claims to the title. To minimize risks that come with a bargain and sale deed, some buyers perform a title search, purchase title insurance, and contract a real estate attorney before purchasing a foreclosed home.
5. 5. Deed of trust: A deed of trust is used in home loans and is signed among three parties—a lender (called the beneficiary), a borrower (called the trustor), and a third party called a trustee. During the course of the loan, the trustor transfers the title of the property to the trustee (typically a title company). The trustee holds the title until the trustor (borrower) has fully paid off their lender (beneficiary). If the trustor defaults on their loan, the trustee sells the property and uses the proceeds to repay the beneficiary for their loan.
6. 6. Mortgage deed: A mortgage deed functions like a deed of trust with one key difference. This type of deed features only two parties—a lender and a borrower. The trustee, who holds the title in a deed of trust, does not factor into a mortgage deed. Title in the property is split evenly between the lender and the borrower until the mortgage is paid in full. At that point, the title goes exclusively to the homeowner, who no longer owes any debt.

Homebuyers must navigate both titles and deeds as part of their real estate journey, but the two terms are not synonymous.

• Title: In real estate, the title is the legal right to own a piece of real property such as a building or a parcel of land. The most common type of ownership is called fee simple ownership, where the property owner has full rights to use the land or building as they choose provided they pay property taxes and abide by local laws.
• Deed: A deed is a legal document that transfers the title between parties.

To fully understand how signing a deed will affect your legal ownership status, consult a real estate attorney.

All investments, including real estate investments, come with inherent risks which may involve the depreciation of assets, financial losses, or legal ramifications. The information presented in this article is for educational, informational, and referential purposes only. Consult a licensed real estate or financial professional before making any legal or financial commitments.

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