A deed is a written instrument that serves an important legal function: to transfer or convey title to (ownership of) real property, such as a home or vacant land. This might be via a traditional home sale, a gift or inheritance, or something similar. The main types of deeds in a real estate transfer include:
- general warranty deed
- quitclaim deed, and
- bargain and sale deed.
Each has its own characteristics and preferred uses, as discussed below.
Types of Deeds for Transferring Property to New Owner
Here are the three most common types of deeds typically used to sell or transfer ownership of property in the United States, and a description of how they typically work (though the details might vary, depending on the law in your state):
- General warranty deed. This is the most common type of real estate deed, which most Americans would use and expect when buying or selling a home. This deed typically contains covenants of title, which are promises that the grantor owns the property free of tax or other liens or encumbrances (other than any already mentioned on the deed), and is conveying the entire interest in it to the grantee. The grantor warrants or guarantees against any acts or omissions on their part or on the part of any predecessors in title who might undermine the quality of the title and interest being conveyed.
- Quitclaim deed. This is a less common type of deed, but a nevertheless important variety to be aware of. A quitclaim deed gives all of the right, title, and interest of the grantor in the land described. It contains no warranties, however. A quitclaim is used by grantors who intend to convey only such interest as they have, as opposed to a grant of the property with warranty of title. That is to say: Nothing is conveyed by a quitclaim deed if the grantor had no title to, nor interest in the property being conveyed. If someone attempts to use a quitclaim deed in an ordinary sale, this is a red flag to a buyer, perhaps signaling that the “owner” does not actually own the property. But a quitclaim is often used (appropriately) in real estate transfers that don't involve money, for example to switch ownership of a house from a parent to a child, or to place it in a trust.
- Bargain and sale deed. This deed simply recites that consideration (money or something of value) has been paid and purports to convey the described property. The deed contains no express warranties, other than in some cases in which the owner promises not to have done anything to encumber the title (such as take out an additional mortgage). Bargain and sale deeds are often used when the seller can’t promise full title because liens, easements, or other encumbrances have been placed on the property by third parties (like neighbors or contractors), perhaps without the seller's knowledge. Why doesn't the seller know? Because, like with the quitclaim deed, bargain and sale deeds are most often used for atypical transfers, such as when the seller has never lived on the property but is an estate executor, a foreclosing bank, or the IRS (after a tax sale). Any buyer presented with a bargain and sale deed should be wary of accepting it without first doing a comprehensive search for other potential title-holders or lien-holders on the property.
Formalities Required for Property Deeds to Be Legally Valid
All conveyances of land made during the lifetime of the grantor must be in writing. This is the law in all U.S. states, partly because under something called the Statute of Frauds, which has been adopted in every U.S. state, conveyances of property must be in writing; there is no such thing as an oral deed.
While each state and county might have its own particular requirements, the usual requirements for written deeds include that they contain:
- identification of the grantor or grantors (in many cases, the sellers) who are conveying an interest in real property by the deed
- identification or description of the grantee or grantees who are taking the interest from the grantors in the real property
- words of conveyance showing that the parties intended to transfer title
- description of the land being conveyed
- signature of the grantor, and
- indication of delivery and acceptance of the deed; the deed must be delivered to the grantee and accepted by the grantee.
Many states, such as Washington and Oregon, have codified the form that a deed must take.
A deed must be filed publicly, typically in the clerk’s office of whichever county the real property is located in. Once on file, the new owner has legal "title” to that property.
Imagine, for example, that Suzanne sells her Brooklyn townhouse to Bob. In exchange for the agreed-upon price, Bob will receive a copy of the deed. An additional copy will be filed in the Kings County Clerk’s Office. It thus becomes public information that Bob is the current owner and deed-holder of that piece of real property (which help prevent others from claiming they own it). Bob can now say that he “has title” to, and owns the property.
How Deeds Are Recorded With Local Government Offices
Although deeds need not be acknowledged (or notarized) in order to be valid as between the grantor and grantee, most deeds are acknowledged so as to satisfy a common prerequisite to recording the deeds with the county recorder.
An acknowledgment is a statement that an instrument was in fact signed by the person whose signature appears on it. A certificate of acknowledgment is a notary public’s formal statement that the person identified the signature on the document as their own in the notary’s presence and that the person was, indeed, the individual who signed the document.
A deed is deemed to be recorded when it has been duly acknowledged or proved and is deposited in the office of the recorder of deeds, with the proper officer, for recording. Recording is required in order to give notice of the transfer of real property to subsequent buyers and to people with claims against the property.
When to Hire an Attorney
If you have any questions about real estate deeds, including whether you can safely accept a certain type in a land transfer, contact a real estate attorney in your area.