June is National Homeownership Month! What better way to celebrate owning property than discussing the types of deeds you can use to become a homeowner.

As we all know, a deed is the vehicle to transfer property. However, there are many different types of deeds, each used in different circumstances. While all will transfer ownership of the property, the level of warranty and protections to the purchaser vary, which is why it is important to know what you’re really getting.

There are three main types of deeds: quitclaim deeds, warranty deeds, and bargain and sale deeds.

A quitclaim deed is one of the most basic deed forms. In essence, it gives to the buyer whatever the seller had. Importantly, it offers no warranty to the buyer that they actually have any interest in the property. A quitclaim deed also offers no protection against liens, judgments or other encumbrances on the property and does not obligate the seller to assist in discharging them prior to any conveyance. Because of the lack of protection, quitclaim deeds are generally only used in intra-family transfers, transfers to assist with estate planning, or to correct a typo in a prior deed.

A bargain and sale deed is a step up from a quitclaim deed. It gives the buyer the minimal assurance they the seller owns the property, but nothing more. In other words, it still offers no protection against liens or other encumbrances on the property. Generally, you will generally acquire a property via a bargain and sale deed when purchasing a property out of foreclosure, tax sales, or even at auction.

A warranty deed is the most protective to a buyer. It gives the buyer assurance that the seller owns the property, has the legal right to transfer it, and warrants to the buyer that the property is free from all defects, liens, judgments, or other encumbrances. The seller is on the hook if any of these guarantees prove inaccurate. Because of the exceptional protection to buyers, a warranty deed is the default for most property transactions.

No matter the type of deed conveyed, it is always important to consult an attorney, or at a minimum, conduct a title search of the property to identify what you are buying. Purchasing property is a sizeable investment; you’ll want to be protected!