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Real estate deeds and their differences

A deed is a legal instrument that transfers ownership of real estate.  In their book Colorado Real Estate Practice, Willis Carpenter and Holly Hoxeng describe the five types of deeds defined and in use in Colorado.  These deeds are as follows:

1. General warranty deed

2. Special warranty deed

3. Bargain and sale deed

4. Quitclaim deed

5. Confirmation deed

The difference between these types of deeds is in the degree of protection or guarantee that the grantor promises or warrants to the grantee.

General Warranty Deed

Under a general warranty deed, the grantor guarantees the title to the real property against any defects existing before the grantor acquired title as well as during the time of the grantor’s ownership. It’s often stated that the grantor guarantees title for “all of time”.  This is the greatest form of protection that can be provided by a deed. If you are investing in any type of real estate, be it commercial or residential, this would be the deed desired to be conveyed at closing.

Special Warranty Deed

Unlike a general warranty deed, under a special warranty deed the grantor guarantees and warrants title only against defects arising during the time the grantor owned the real property.

Quitclaim Deed

With a quitclaim deed, the grantor guarantees nothing, and the deed only conveys whatever interest the grantor has any the property, if any interest at all. A quitclaim deed is often used after closing to transfer ownership of a property from one entity to another.

Bargain and Sale Deed

A bargain and sale deed conveys the real property as well as any after-acquired title thereto, but contains no guaranties or warranties of title.

Confirmation Deed

In a few limited situations (death, foreclosure), title passes by statute to designated grantees (heirs, successful bidders, redeeming parties), and a deed is required by statute to evidence the transfer of title on the public record.

Buyers and sellers should consult with a real estate attorney to determine which form of deed would be the best for their particular situation. With investors or entities purchasing commercial property it is important that the party acting on your behalf be familiar with each type of deed and the protections provided as it could have a great impact should a title or legal issue arise. As usual, a good rule of thumb is to ALWAYS work with a real estate attorney and commercial broker.