Transfer of property is often made using a general warranty deed because it offers the most protection for the buyer. By offering a general warranty deed, the seller guarantees good title, not only during the time the seller owned the property but going back throughout its history.

That doesn't mean that problems won't surface, but if a title examination was done, it means that the settlement agent who prepares the deed feels comfortable that it is free of problems.

A seller, called the grantor, who conveys property with a general warranty deed guarantees that the following are true:

• He or she is the property owner and has the right to sell the property.

• The property is free and clear of liens and encumbrances, except those in the public records.

• No one else has a right to claim ownership of the property.

• He or she will pay the buyer for loss if future problems arise.

That last guarantee isn't always valuable since the seller might not be in a position to pay the buyer if problems surface. For that reason, title insurance is always a must, even when problems seem remote.

Transferring Property with a Special Deed

Property is sometimes transferred on special types of deeds if one or more of the provisions of a general warranty deed cannot be guaranteed. Special deeds are also used to allow an individual to relinquish all claims they have on a property.

A quitclaim deed is used to transfer real estate with only one guarantee, that the person signing the deed relinquishes all claims he has in the property. Quitclaim deeds are most commonly used to clear up title defects or allow an individual to relinquish rights to a property. For example, an ex-spouse can relinquish a claim on property by signing a quitclaim deed. An easement can be recorded or released by having the relinquishing party sign a quitclaim deed. A former owner whose signature was not acquired when a property was sold can use a quitclaim to relinquish rights to the property.

A special warranty deed is often used to guarantee that the property was free and clear of encumbrances during the time it was owned by the current seller, also called the grantor. The grantor offers no guarantees for dates prior to his ownership.

You might encounter special purpose deeds when you buy real estate. A correction deed does just what its name says — it corrects an error on a previous deed. A deed of release is used to release a property when a loan using it as security has been paid in full. Other types of deeds are used to transfer foreclosures to a lender. Ask your closing agent to explain the facts about your new deed to help you understand the property guarantees you are acquiring.