Other Types of Deeds
As noted in a previous blog the grant deed is the most commonly used deed to transfer title of property in the state of California, however, there are several other deed types that can also be used. Here is a brief explanation of some others:
Quitclaim deeds are another commonly used instrument that may be used when real estate property is changing hands. Quitclaim deeds contrast with Grant Deeds in that a Quitclaim Deed conveys any “interest” in the property, as opposed to transferring title as with a grant deed. With a quitclaim the “grantor” releases any interest they may posses in the property. The grantor may have never been formally identified on a deed describing the property.
By example: If a married person holds “sole and separate” title to a property but wants to sell the property, the spouse not on the title may be asked to sign a quitclaim deed releasing any interest they have in the property. Quitclaims are sometimes also used in a divorce to give sole title from one spouse to the other.
Deed-in-lieu of foreclosure simply means the seller has deeded the property back to the lender in order to avoid foreclosure. This type of deed became very common throughout the recent mortgage and real estate crash. Sellers who were behind in their mortgage payments would negotiate with the lender to voluntarily transfer title to the property back to the lender in exchange for a release from the mortgage obligation.
Warranty deeds are very similar to grant deeds with one primary exception, warranty deeds contain three guarantees as opposed to two in a grant deed. In a grant deed the grantor states that the property has not been sold to anybody else, and that the property is not “burdened by any encumbrances” not already disclosed by the seller to the buyer.
In addition, with a warranty deed the grantor will “warrant” and defend title against the claims from all other persons. Simply put, “the grantor is guaranteeing the grantee that title is free of any defects that may affect the title, even if the defect was caused by a prior owner.”