Getting serious about real estate means getting serious about real estate terms. Do a little research in the field, and you’ll see one dominating truth: a successful investor is an informed investor. Arm yourself with knowledge, and you’ll arm yourself with power.
A variety of terms will arise as you get to know real estate practices. Take deeds, for example. What is a deed? Are there different types of deeds? How can they affect you as a buyer or seller?
WHAT IS A DEED?
Essentially, a deed is a legal document that describes a property and includes the names of the old and new owners; it is signed by the person transferring ownership. It contains information from the plot number in a subdivision to the property lines in a rural locale.
WHAT ARE DEEDS USED FOR?
When property transfers ownership, from one entity to another, the deed is the legal paperwork involved. It passes the property rights to a new owner.
ARE THERE DIFFERENT TYPES OF DEEDS?
Yes: warranty, grant, and quitclaim.
Warranty Deed: The seller/former owner warrants that there are no existing liens on the property in question. It is usually backed up by a title insurance policy. Within this category are general warranty deeds and special warranty deeds; the type depends on the degree to which the guarantor warrants the property.
Grant Deed: A grant deed makes some promises about the property: it’s not been transferred to someone else or encumbered.
Quitclaim Deed: Offering the least security, a quitclaim does not offer a guarantee that the property is owned lien-free. It makes no promises but serves to transfer ownership. This is common when property is transferred without a sale-when a divorce, a death, or some other personal matter is the cause.