When you transfer real estate from a seller to a buyer, you need a deed, a document that is used to transfer property from one party to another. Not all deeds are created equal. In residential real estate, there are three common types of deeds:
General warranty deed: Offering the most protection for the buyer, a general warranty deed includes a series of promises and warranties made by the seller to the buyer. This type of deed explicitly promises to the buyer that the seller has the legal right to transfer the property and that they have a good title.
Special warranty deed: This type of deed offers less protection because it only promises a clean title while the seller had ownership of the property. This type of deed is frequently used in commercial transactions.
Quitclaim deed: A buyer, or grantee, has little or no protection in a quitclaim deed. This type of deed is often used by family members, divorcing couples, or friends who are transferring their interest in a property to another person. A quitclaim deed makes no promises about the quality of the title.