For residential real estate purposes, we normally deal with general warranty deeds, special warranty deeds and Fiduciary Deed. Our Agreement of Sale specifies a special warranty deed but your buyer may wish to negotiate for a general warranty deed. Your seller may have also received his deed by Quit Claim Deed, Tax Deed, Sheriff’s Deed or a Deed in Lieu of Foreclosure. The following is a brief description of these various types of deeds.
- General Warranty Deed– the covenants of title in this type of deed apply to all defects in title, including those that arose prior to the seller’s ownership. The sellers warrants or promises that neither he nor anyone who previously owned the property has made the title defective.
- Special Warranty Deed– warrants that the seller has not impaired the title during his ownership. It does not contain a warranty against defects or claims against the property that arose prior to seller’s ownership nor does it obligate the seller to do anything further once title is transferred to buyer. This is the default type of deed specified in our Agreement of Sale.
- Quit Claim Deed– is a release passing any title, interest or claim that the seller may have in the property but it contains no warranty of interest. A quit claim deed is most often used between family members or divorcing spouses.
- Fiduciary Deeds– is given by a fiduciary, whether a trustee of a trust, an executor or administrator of a decedent’s estate, a guardian of a minor or incapacitated person. The fiduciary holds the title to the property on behalf of another. The warranty given by a fiduciary is limited because the fiduciary has little or no knowledge of the title to the property.
- Tax Deed– conveys title to the property sold by a governmental taxing body for nonpayment of real estate property taxes.
- Sheriff’s Deed– conveys title to a property from the county sheriff resulting from a judicial proceeding. This is the type of deed received when a property is purchased through a mortgage foreclosure proceeding.
- Deed in Lieu of Foreclosure– is given by the owner of the property to the bank which holds the mortgage on the property when the mortgage is in default and foreclosure is imminent. This deed is given to the bank by the property owner. The bank does not pursue mortgage foreclosure proceedings.
An owner’s title insurance policy protects the buyer if a title problem of a covered item arises. The buyer pays a one-time fee to the title insurance company based on a scale as submitted by the title insurance company to the PA Insurance Commissioner. This purchase of title insurance protects your property investment. It is available to buyers in both cash and lender-financed transactions.