During the process of selling or purchasing a house, there will probably be several kinds of documents that you will encounter. All will have different names and different uses and functions. Two of the most misunderstood documents are the warranty deed and the quit claim deed. These forms are not alike but many think they are.
A warranty deed is a document which the seller will present to the buyer and is used in the majority of all sales transactions. It simply states that the seller owns the property that is being sold and that it is free from any liens. By presenting the warranty deed, the buyer is assured that the title holder has the legal right to transfer ownership of the property and that no other financial institutions or creditors can make a claim on the property. In someone does lay claim to the property, or that the claim stated in the warranty is erroneous, the buyer is protected by law and is entitled to receive a form of compensation. Warranty deeds seldom stand alone and are usually backed up by a title insurance policy.
A quit claim deed is slightly different. A quit claim deed is presented to a buyer by someone who does not necessarily own the property but holds responsibility for it. There are many reasons where this could be the case but two of the most common include death and marriage. An owner dies and bequeaths the property to one of his heirs. The owner of the property marries and wants to include the name of his new spouse to the title. A quit claim deed offers a lower level of protection to buyers and is used primarily when the property in question will stay within a family.
There could be times when both a warranty and a quit claim deed are presented to a buyer. For example, a piece of property lies on the border of a lake or river. The ownership of the underwater land on which his property stands remains unclear.
If you are unsure which kind of deed works best for your property, consult a real estate agent or a real estate lawyer.