Types of Deeds Used in Land Purchase

There are many different types of Deeds which can be used to convey real estate. Many of our buyers, especially buyers who have previously owned real estate, want to know what type of deed we use to grant ownership of property to you, the buyer. I’ll explain this in detail, but I’d also like to discuss several other types of Deeds, and the advantages and disadvantages of each.

Warranty Deed

The Warranty Deed is the most common type of Deed used in Arizona because it offers the best protection to the buyer. In Oregon, Warranty Deeds are also commonly used. In California, Warranty Deeds are also used, but they are uncommon. The closest equivalent to a Warranty Deed in California is a Grant Deed, but in this discussion I will use Warranty Deed to also mean Grant Deed.

The Warranty Deed contains three warranties. These warranties are promises that the seller makes to the buyer regarding the condition of the title to the property.

The first promise is the Covenant of Seisin. By the Covenant of Seisin the seller warrants that he or she actually owns the property and has the right to sell it.

The second promise is the Covenant Against Encumbrances. Like the name implies, this is the seller’s promise that the property is free and clear of any encumbrances (liens, loans, mortgages, taxes, etc…).

The third promise is the Covenant of Quiet Enjoyment. This obligates the seller to defend the title against any claims as of the moment the deed is delivered to the buyer. In other words, if a third party appears two years after the warranty deed has been delivered to the buyer, and claims to have an interest in the property, the seller is required to defend the title which was given to the buyer.

We always use Warranty Deeds to convey land to our buyers when the land is paid in full. Remember, when you purchase property, always insist on obtaining a Warranty Deed when the property is paid off!

Bargain and Sale Deed

A Bargain and Sale Deed is a much weaker instrument than a Warranty Deed. When a seller uses a Bargain and Sale Deed, the buyer does not get any of the three covenants that a Warranty Deed conveys. In addition, the seller is under no obligation to defend the title.

Quitclaim Deed

The third and final type of commonly used Deeds is a Quitclaim Deed. This is, without question, the weakest instrument one could use to convey property. Where a Warranty Deed guarantees that the seller owns the property, and is selling it to a buyer, and will defend the title and give the three promises, the Quitclaim Deed contains none of these guarantees.

Basically, a Quitclaim Deed states — IF the seller has an interest in the property, they are giving it to the buyer. Notice the word IF. In other words, “if it turns out that I have an ownership in this property, then I’m giving whatever interest I may have to you, Ms. Buyer.” It would be perfectly legal for me to give you a Quitclaim Deed to the White House — if I have an interest in it, I’m giving it to you. There are no guarantees with a Quitclaim Deed, and the seller is making no promises. Obviously, we never use Quitclaim Deeds to convey any of our land parcels. It just doesn’t give the buyer any security.

Be sure to seek legal advise if you have questions about the different types of deeds used in real estate transactions. For more information about purchasing land thru an online land auction visit Radius Land.