When it comes to title and escrow, there are many different types of conveyances. Some of the most common ones you will see are the Warranty Deed, Deed of Trust, and Quitclaim Deed. Warranty and Quitclaim Deeds are used to transfer ownership of property, while a Deed of Trust is used to secure a lender’s interest in the property. All types of conveyances must be signed and notarized in the presence of a notary public, then sent to the county to be recorded before it takes effect.
A Warranty Deed is signed at closing in purchase and sale transactions. It conveys the title of the property from the grantor, or seller, to the grantee, or buyer. This deed warrants that the grantor owns the property and that there are no outstanding liens, such as a mortgage, that will carry over from one owner to the next.
When using a loan to purchase or refinance a property, a Deed of Trust is used. It’s used to prevent the selling or buying of property without the loan being paid off through closing. If your title commitment reflects the property is encumbered by a Deed of Trust, escrow will ensure that the loan is paid off so that the deed of trust can be removed for the coming title policy of the new owner.
The third most common conveyance is the Quit Claim Deed. This is used to change vesting or ownership of a property. For example, if you purchased a property as an unmarried individual and then got married, you could quit your sole claim in the property and add your spouse’s name. Unlike the Warranty Deed, the Quitclaim Deed does not warrant the state of title for the property.
No two transactions are the same and laws vary from state to state, so there may be other conveyances or documents needed depending on the transaction.
