Property Transfer Deeds to Smoothen the Process

Property deeds help you transfer or assign ownership of property, title to the land and a house in that land. Unlike earlier times, today such transfers are recorded electronically. There is a grantor and a grantee involved in the transfer of ownership.

The grantor is the individual who wants to sell the property and the grantee is the one who buys it. There are 3 main types of deeds:

Grant deed: This a deed most commonly used in California. The grant deed contains 2 guarantees:

1. The grantor assures that this property has not been sold to any third party.
2. The grantor assures that the property does not have any problems apart from those already mentioned to the buyer.

The advantage of grant deeds is that they don’t need to be recorded or authenticated to be valid. However, most buyers need the protection to be able to validate that the property has been sold.

Warranty deeds: These deeds have quite a similarity to the grant deeds and are mostly used in the Midwest and the Eastern states. The one exception to the grant deeds is that the grant deed has 2 guarantees whereas the warranty deed has 3 guarantees:

1. The grantor assures that the property has not been sold to a third party.
2. The grantor assures that it is free from any impediments besides those already disclosed to the buyer.
3. The grantor is meant to justify and defend title against any claim made by any person. This means that the granter is guaranteeing that the title is not defective even if a previous owner may have caused the defect.

Quitclaim deeds: Also erroneously referred to as ‘quit claim deed‘ and ‘quick claim deed’, this deed is used to convey the interest from the grantor to the grantee. This deed is seen mostly used in case of a divorce where the property is quickly moved from one spouse to another.

What are the other types of deeds?
There are 3 other types of deeds:

1. Tax deed: For property sold with unpaid taxes. This deed is used to convey title to a buyer.
2. Gift deeds: These are used for transfer of property without money i.e. as a gift. This is usually used to transfer titles among those who are related to each other.
3. Deed-in-lieu of foreclosure: Sometimes, individuals who lag behind in payment may come to an agreement with a lender to accept a Deed-in-lieu of Foreclosure. This means that the property has been transferred to a lender by value of a deed in order to avoid foreclosure. However, this may still get reflected on the individual’s credit report.

Samantha Taylor is a contributing Financial Writer, Moderator and Community Mentor of MortgageFit. She has been an active participant in the forums wherein she offers mortgage advice and suggestions to people in loan problems. If you have a query on “how much house can I afford” related issues, you can simply discuss it with her in the Mortgage Forum.