An Explanation of Property Deeds

An Explanation of Property Deeds

PropertyDeedsIn every purchase/sale of Real Estate, the buyer is granted title to the property from the seller through the delivery of a Deed.  The escrow company/title company or an attorney prepares this Deed, and the Deed shows the seller, currently vested on title, is granting the title to the buyer, as the buyer has chosen to take title of the property.  Because there is more than one type of property Deed, some buyers may have questions about why a certain Deed was issued in the transfer of their property.

There are four types of deeds: Grant Deeds, Warranty Deeds, Special Warranty Deeds, and Quitclaim Deeds.  A Grant Deed or general Warranty Deed is normally used in the transfer of residential real estate, while a Special Warranty Deed is typically used in Commercial property.  Special Warranty Deeds are also now more commonly being used in the transfer of REO, or Real Estate Owned, properties.

In all Grant Deeds the grantor gives a “general warranty” of title against any claims.  With a Grant Deed and a Warranty Deed, the grantor’s warranty applies to any period of time, while the grantor held title or before they held title.  In a Special Warranty Deed, the grantor gives the warranty for only the time period in which they held title to the property.   Quitclaim Deeds are most often used to transfer title to family members, divorcing spouses, or to people who know each other.

All warranty given through a Deed pertains only to the condition of the title of the property.  It has nothing to do with the condition of the physical property.  The Deed must also include the legal description of the property as well as the APN Number that is displayed on the tax rolls for the property.  The Deed is prepared in accordance with the type of property that is being transferred, or per specific instructions provided by the seller, and is usually recorded within one business day after escrow has received receipt of loan funds.

The state of California views Grant Deeds, Warranty Deeds, and Quitclaim Deeds as the same thing.  The Deed conveys ownership, and the title insurance company will insure that the buyer receives clear title to the property they are purchasing and guarantees against encumbrances.  As long as buyers go through an escrow and receive title insurance at the close of their escrow, they do not need to be concerned with the type of Deed that is used to transfer the property into their names.