Buying property is stressful. There’s a lot of paperwork involved, it’s rarely a quick process, and either party may end up pulling out at the last minute.

Then there’s the new jargon that every prospective homeowner should learn. New terms like title and deed come into play and if you don’t know what they mean, it could end up costing you.

Which is why we want to help you out. We believe every home buyer should be armed with all the facts before they make any major purchases.

We’ve compiled a list of the most common jargon associated with property deeds. Keep reading to learn what they all mean.

What Property Deeds Are

Property deeds are the legal instruments that help assign and verify ownership of real estate. Property deeds also transfer title to land and its improvements which in most cases relate to the house on the property.

There are several words that are used to convey property transfer. However, these words which include assign, convey, warrant, and grant all mean the same thing.

It means transferring ownership of the home from the person selling to the person buying.

Grant Deed

Grant deeds provide the buyer with two guarantees. It guarantees the property has not been sold to anyone else. The seller also guarantees that there are no burdens attached to the property other than what has already been shared with the seller.

You don’t need a grant deed to be notarized or even recorded to make them valid, though many sellers do ask a notary to witness the deed. Many buyers also prefer to have this type of deed recorded for added protection.

While state laws differ, there are six elements that most states agree the grant deed must contain in order to be considered valid.

The deed must be a written document and must include a clause that transfers the title, which is called a granting clause. The names of the grantor (seller) and grantee (buyer) must be listed and it must bear the seller’s signature.

A description of the property being transferred must be included and it must be signed by a buyer who is considered competent and is not a minor.

Warranty Deeds

Many people want to know what is a warranty deed. But there are actually a few types of warranty deeds. Let’s go over them now.

General Warranty Deed

The General Warranty Deed offers the highest level of protection available to the buyer. With this type of deed, the seller conveys the property along with certain warranties. The seller is legally bound by this warranty.

This type of warranty deed provides three guarantees. The seller states the property hasn’t been sold to anyone else. The seller also states the property isn’t encumbered or burdened by anything that hasn’t already been disclosed to the buyer.

The seller also agrees to warrant and defend the title against any and all other claims. In other words, the seller guarantees the title is free from any problems that may affect the title.

Special Warranty Deed

While it may sound like the buyer is more protected with a Special Warranty Deed than with a General Warranty Deed, but it’s the opposite. There are fewer warranties with this type of deed.

The grantor (seller) conveys the property and warrants they’ve received the title and that the property was not overburdened or encumbered while it was owned by the seller.

However, a special warranty deed does not protect against any defects that happened before the current owner purchased the property.

Bargain and Sale Deed

This type of deed leaves the buyer with no protection from any burdens but does imply the seller holds the title to the property. However, that can cause problems if the title shows defects.

The Bargain and Sale deed is used for special purposes such as for tax sales and foreclosures.

A Quit Claim Deed Vs. Warranty Deed

Many people wonder what the difference is between a Quit Claim Deed vs a Warranty Deed. As you know, a warranty deed guarantees the seller is the rightful owner, that there are no burdens with the property unknown to the seller and that the seller can defend the title.

A Quit Claim Deed, however, provides the least amount of protection for the buyer. A Quit Claim Deed is used when the deed is completed and executed. The deed then transfers all its interest to the buyer.

The problem is that the seller may or may not be the owner. This type of deed doesn’t promise the seller is the rightful owner.

Most Common Situations Where Quit Claim Deeds are Used

This type of deed is often used in divorce situations so one spouse can deed it to the other spouse. The Quit Claim Deed then helps ensure that the spouse who signed the deed won’t later try to claim the property, enabling the other spouse to rightfully sell the property.

Quit Claim Deeds are also used in situations where more than one family member co-owns a property. In other words, if two brothers jointly own a piece of property, one can transfer their half of ownership of the property to the other brother.

Title Vs. Deed

There is a difference between a title vs deed. The deed is the legal document you use to confirm or convey ownership rights to a property. It’s a physical document that must be signed by the seller and the buyer.

The title is just a legal way of stating your ownership of the property. It’s not actually a document, but rather a concept that gives you the rights to use the property.

Keep Learning

It’s important to understand fully what all real estate jargon means. The more you educate yourself, the less likely it is that you’ll make a mistake.

It also means you end up with a property you love. But you must keep learning. There’s a lot to learn about real estate besides knowing what property deeds are.

Our blog can help. Keep coming back to learn about the ins and outs of real estate investing.