Buying a new home is an exciting venture for any adult, but it’s one that comes with the need to do due diligence. One thing that must be checked is the type of deed that’s being delivered with the home purchase.
There are four common types of deeds (general warranty, special warranty, limited warranty and quitclaim) that are used to transfer property, each of which offers different levels of protection. Understanding these may help anyone who’s purchasing a home to ensure they’re receiving the type of deed they need.
What protection does each deed offer the buyer?
A warranty deed provides full legal protection for the buyer. Some buyers may notice that the deed is a special warranty deed, which is also known as a limited warranty deed or a grant deed. This means that the protection is limited to the seller’s period of ownership, so the buyer wouldn’t have the same protections.
A quitclaim deed doesn’t have any warranties. It’s typically used during a divorce or when there’s a transfer of a home between family members. Some municipalities use this type of deed in tax seizure sales. Another type of deed is a bargain and sale deed, which is usually used for foreclosed homes.
The type of deed is only one factor that homebuyers have to consider when they’re trying to decide if they’re going to purchase a home. They must understand every aspect of the real estate transaction, so it may behoove them to work with someone who can assist them with the process.