Title represents ownership while a deed is the instrument used to transfer the title of real property from one person to another. A person holding the deed to a parcel of land holds the title as specified by the writing in the deed. Don't confuse a deed with a deed of trust which we will discuss later. A deed transfers the title of real property while a deed of trust is a means of financing a land purchase. Different types of deeds are used in the United States such as the Warranty Deed, Bargain and Sale Deed and the Quitclaim Deed. The Warranty Deed is sometimes called the Full Covenant and Warranty Deed or General Warranty Deed.
The advantage of the Warranty Deed is that when the title is transferred, specific warranties are included. The seller warrants that he or she is the fee simple owner and has the right to sell the property. And that there are no mortgages, liens, easements or encumbrances on the property other than those in the public records. The seller guarantees the statements and is liable in court if the buyer finds otherwise. The seller also warrants quiet enjoyment to the buyer. Should a problem arise such as a previous owner with a claim, the seller will work with the title company to take care of the problem. The seller will do whatever is necessary to provide the buyer with the title promised in the deed.
A Warranty Deed basically means that any information provided by the seller to get you to buy the property has to be true or else you have legal recourse. A Bargain and Sale Deed transfers title and establishes that some form of consideration has been transferred. The consideration can be money or something else with value. The seller warrants that they do in fact own the property and that they have done nothing to encumber it. For the best protection when buying a property with this type deed, ask for a Bargain and Sale Deed with Covenant Against Grantor's Act. Even with this, the seller is liable only if he or she has caused a problem with the title, such as an encumbrance, but not the activities of previous owners. With a Warranty Deed the seller is liable for any encumbrances on the title. So, the Bargain and Sale Deed is called a Special or Limited Warranty Deed.
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By: Raymond Pedersen
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