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General Warranty Deed vs. Quit Claim Deed
| | Wednesday, September 10, 2003 @ 08:00 AM EDT
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Contributed by: Daniel Cobb
Daniel Cobb Properties
Read more archived articles about Buying
It has come to my attention that quite a few people in real estate are unclear on the difference between a quit claim deed and a full warranty deed. So here is a general description of there differences. Hope it helps.
A full warranty deed gives all guarantees that the current owner of a property has all rights to it and full ownership (unless specifically noted otherwise). A full warranty deed also has a title search done on it to help reassure that there are no unknown claims on the property. The buyer of a property that has a full warranty deed would be protected against any legal expenses or financial loses that may arise due to someone else's claims that they have some prior rights or liens on said property. Ok, so the question is - why would someone want any other type of deed? Ok, bare with me.
A quit claim deed is a deed that probably has not had a title search done on it and guarantees no rights to a new owner. It transfers only whatever interest the grantor (seller) may have when the deed is delivered. So when should one want or use a quit claim deed? The most common use for quit claim deeds is to fix errors on a title for property: such as spelling errors and other misinformation. It is used in this situation
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because usually a full warranty deed already exists for the property in question and it is cheaper and quicker to use a quit claim deed to fix such minor problems with a title.
There are some times when one may want to consider buying a property that is being sold with a quit claim deed, but the key to this (like everything else in life) is to first do your homework and know what you are buying. For example, if you are getting an extremely good deal in price, have already checked all available records on a property, and feel confident that known one else has any claims on that property, you may consider purchasing it even though it only has a quit claim deed. Also, you may consider taking a quit claim deed if you are buying property from the government that was taken due to delinquent taxes, such as property at scavenger sales. This is because under law once a property is taken from it's owner due to a tax lien all other previous liens or financial claims against that property become uncollectable. If you would like further information on types of deeds and there differences check your state laws and/or contact your local title company.
Note: Daniel Cobb has written the EBook Complete Guide To Investing In Real Estate Through Government Scavenger Sales.
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