What is a Deed in Terms of My Home?
The little word “deed” is a very important word in the world of real estate and can mean the difference in being able to sell your house and not being able to. The sneaky thing about deeds is that it does not become an issue until it becomes an issue … so deed issues are often overlooked. There are several types of deed, but let’s explore the 3 most common ones.
Special Warranty Deed
So you are the buyer who wants to purchase a property from someone. If this someone provides you with a Special Warranty Deed, then in essence they are telling you “For the time that I have owned this house, I will defend the title and take responsibility for title as I’ve owned it, however anyone who has owned this property may have claims or title issues that I cannot be responsible for if they were to come up.” This can be very problematic for you should a previous owner show up later once you bought the house with any claims. It doesn’t sound too secure, and title companies (those who issue the policies to protect someone from a claim), don’t particularly feel comfortable with them either and for that reason do not generally recognize these types of deeds.
For some reason this is a common occurrence within families. Generally if certain family members are trying to shield some interest from other members they will quitclaim deed interests to one another. Or this more commonly happens in divorces – but this is definitely not something you want to do before talking to an attorney. Quitclaim deeds do not actually convey real property. The person who signs the deed is simply removing himself of all current and future interest in the real property but not conveying any real property, and that’s in essence what a deed does – convey or transfer real property from one party to another. For that reason title companies definitely do not insure policies on these types of deeds.
General Warranty Deed
If you are buying a property then this is the one you want and title companies will insure this type of deed with no problems. In this instance, the seller is telling you “I will defend and warrant clear title against anyone who claims an interest in the property – even before I even owned it.“ This deed provides a secure, protective shield and should really be used at all times.
Simply having a “deed” to a house is not sufficient. You need to be sure what type of deed you received from the seller when you bought a home and for any other future purchases. Don’t be one of the unfortunate ones who don’t realize what they have, or don’t have when it becomes time to sell. Save yourself the trouble and check your deeds!
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