A deed is the written document that transfers ownership of real estate. You cannot transfer an interest in real property verbally. A valid deed must contain the names of the old and new owners, a legal description of the property, be signed by the party transferring the property, and contain a notary seal from a notary public verifying the identity of the transferor(s). Here is a brief rundown of the most common types of deeds:
A quitclaim deed transfers whatever ownership interest a person has in a property. It makes no guarantees about the extent of the person’s interest. Divorcing couples commonly use quitclaim deeds; one spouse signs all his or her rights in the couple’s real estate over to the other. A quitclaim deed can also be useful if it isn’t clear how much of an interest, if any, a transferring owner has in property. In addition, quitclaim deeds are a great tool when there is a “cloud” on title – that is, when a search reveals that a previous owner or some other individual may have some claim to the property. The individual can sign a quitclaim deed to transfer any remaining interest.
A grant deed transfers ownership and implies certain promises – that the title has never been transferred to someone else or been encumbered by a mortgage, except as identified in the body of the deed.
A warranty deed transfers ownership and promises the buyer that the transferor has good title to the property, meaning it is free of liens or claims of ownership. The transferor guarantees that he or she will compensate the buyer if that turns out to be wrong. The warranty deed may make other promises as well, to address particular problems with the transaction.
Deeds are necessary legal tools. Unfortunately, a mistake contained in a deed can result in serious ownership issues. Always consult with a real estate lawyer if you have questions.