To Deed or not to Deed, That is the Question!

I sometimes get questions at closing from both REALTORS and clients about deeds when they learn my background, so I decided to devote a brief post to it.  Though it is doubtful that you will ever use any type of deed other than a general warranty deed, knowledge is always useful..and reading this is a lot less tedious than sitting through a law school class on Real Estate Transactions (trust me, bbooorrrriiinnngg).

To begin with, a deed is the actual legal written document that conveys an interest in, or legal title to, property, when properly executed and delivered.  Do not confuse the contract for sale with the actual deed, as the contract for sale is just an agreement to transfer a property for a sum certain, while the deed actually does transfer the property.

The most common type of deed in residential transactions is the general warranty deed.  But there are times when a different type of deed is either appropriate or required, and you can really serve as a top-notch agent to your clients if you recognize an area where a different type of deed may be called for.  The following is a list and brief definition of the most common types of deeds, though be sure and call your real estate attorney or title attorney for further information on the types of deeds used in your state or for further information.

1. GENERAL WARRANTY DEED - grantor warrants the title against defects arising before and during the time the grantor owned the land.  Most common type of deed.
2. SPECIAL WARRANTY DEED - grantor warrants the title against defects arising during the time the grantor owned the land.  Sometimes used by builders or developers who commonly issue deeds to large numbers of buyers and wish to protect themselves against title problems.
3. QUIT CLAIM DEED - grantor does not warrant either title to the property or even possession, instead the grantor simply conveys whatever interest they do have.  Sounds worthless but is actually a fairly common form of deed which is used to release a claim whenever there is a cloud on title and proper ownership may be in doubt.  One party will issue a quit claim deed (sometimes with settlement payment) to release any potential claim they might have had.
4. CONTRACT FOR DEED - agreement for installment purchase of real property directly from the seller.  Rarely used today as it can be dangerous to create an installment purchase in the deed itself.  There are many other safer and more common ways to purchase a property in installments without using the deed itself.
5. CERTIFICATE OF TITLE - conveyance of property through a foreclosure in many states.  Different states will handle foreclosure sales in different ways, however.
6. JUDICIAL DECREE OR FINAL JUDGMENT - a judicial decision, depending upon the issues involved, can act as a deed in many circumstances and cases, usually resulting in a sheriff's deed for the property involved.
7. ORDER OF TAKING - used to convey property taken by eminent domain in a judicial or administrative proceeding.
8. SHERRIF'S DEED - a judge orders the sale of property to satisfy a judgment rendered by the court in a lawsuit.
9. TAX DEED - transfers ownership for non-payment of property taxes, depending upon the state the property is located in.
10. TRUSTEE DEED - deed used to transfer property into or out of a trust, which is a separate legal entity for most purposes which requires a conveyance from the original owner into the trust itself.

Though the legal process to transfer possession from one entity to another can be a bit complex, hopefully this sheds a little light on the types of conveyances that can be used in most situations.  Title companies are extremely organized and now have extensive electronic media of all deeds filed in their locations, though you can still go to your local county records office, pull out a huge volume and search through the deed history of your home if you desire.