Types of Deeds

By Jeffery Watson

This is not a good deed vs. bad deed conversation. This is a discussion of the different types of deeds whereby individuals can transfer and take title to real estate. The original gold standard for most of us in this country, based upon well-established, English jurisprudence, is a General Warranty Deed to transfer fee-simple, absolute title. This is an indication that the Grantor or Seller is warranting (guaranteeing and promising) that they have good title to the land and are transferring to the buyer that same good title, that they are lawfully vested in it, that there are no liens or encumbrances preventing the transfer, and that no one else has a claim to it other than the sellers in that transaction.

Another type of deed is the Limited Warranty Deed, which has risen in popularity due to the slight foreclosure housing crisis which began 10-12 years ago. Institutions who took back property via foreclosure are selling the properties to the next buyer using a Limited Warranty Deed. A Limited Warranty Deed indicates that they are only warranting title for as long as they were the owner and are not warranting the quality of the title by which they received the property. When someone wants to transfer title to you via a Limited Warranty Deed, absolutely insist that they, as the seller, pay for an owner’s title policy. If you are dealing with First American, see if you can get what they call an “Owner’s Eagle Policy” which has the highest level of coverage available under First American.

A type of deed that is frequently talked about and horribly misunderstood in the real estate space is the Quit Claim Deed (not “Quick” Claim Deed, as it is so often inaccurately called). A “Quit” (as in “stop”) Claim Deed is someone saying that they are only transferring whatever right, title and interest they may have, whether everything or nothing, to someone else, so that person cannot accuse them of not giving them good title, and they are not warranting or making any promises with the transfer.

I have often used Quit Claim Deeds to clean up confusion regarding title when a buyer on a Land Installment Contract or Contract for Deed has failed to fulfill the contract. After making several payments whereby they might have an equitable interest in the property, we will get a Quit Claim Deed from them back to the original owner/seller.

The last deed I want to mention is what we refer to as a Fiduciary Deed. This is a deed whereby someone is signing in their capacity as a fiduciary. The two most common uses of this type of deed are when someone is signing a deed as a Trustee on behalf of a Trust, and when property is being sold out of an estate. If someone is signing as a Trustee of a Trust, or they are the personal representative or executor of an estate, they are acting as a fiduciary and are thereby giving a Fiduciary Deed based upon their court-appointed powers.

I hope this overview of the various types of deeds to convey real estate has been helpful in clarifying the differences in the deeds and how they should be used.

Jeffery S. Watson

Attorney

Jeffery S. Watson is an attorney who has had an active trial and hearing practice for more than 27 years. As a trial lawyer, he has a unique perspective on real estate investing, wealth building and asset protection. He has tried over 20 civil jury trials and has handled thousands of contested hearings. Jeff has changed the law in Ohio 5 times via litigation or legislation:

Smith v. Rudler – 70 Ohio St.3d 397
In re Hugley – 629 N.E.2d 1136
Bahr v. Progressive Insurance – 2009-Ohio-6641
Snyder v. Snyder – 865 N.E.2d 944
H.B. 463 amending the Ohio Civil Rights Act

Jeff has also been a real estate investor since 1994, investing in both residential and commercial properties. He currently represents established real estate investors in commercial and residential matters when the transactions involve self-directed retirement accounts. As a frequent and popular guest speaker and teacher on stages and webinars, he is a recognized thought leader and innovator in the field of real estate investing, wealth building and self-directed retirement account transactions.

He is a nationally-recognized authority regarding regulatory concerns with wholesaling. He was the co-creator of the Option Contract method that revolutionized the short-sale flipping process. Thousands of investors have used documents created by Jeff to flip properties.

Jeff is general counsel to the National Real Estate Investors Association. Jeff is general counsel to and a cofounder of Realeflow, LLC, which made the Inc 500 list in 2011. He currently advises six different national organizations with a combined membership of over 250,000 investors.

From 2010 to present, Jeff has led lobbying efforts in Washington, DC on behalf of real estate investors which has brought about several changes in both government regulation and policy on distressed property purchases and resales. In 2014 and 2015, his efforts on Capitol Hill helped bring about change in the U.S. tax code and helped reinstate the Mortgage Debt Forgiveness Act. Since 2015, Jeff has worked to secure passage of the Seller Finance Enhancement Act.

Jeff’s efforts to secure reform in the real estate arena aren’t just on Capitol Hill. In his home state of Ohio, he has worked with the Ohio Division of Real Estate teaching on the legality of wholesaling.

He is a part owner of Venture Land Title II, LLC, and his law firm prepares deeds and other documents for two title companies. He is also legal counsel to a number of other organizations including Eagleville Bible Church, Inc.

Jeff is the author or co-author of 6 digital books:

• “Understanding Self-directed Individual Retirement Accounts”
• “A Guide to Private Lending”
• “Short Sales Done Right – How to Profitably and Legally Navigate the Short Sale Jungle”
• “Death of the Land Trust … in Short Sales”
• “How to Hire Your ‘Dream Team’ ”
• “Understanding the Foreclosure Process”

In addition to his digital books, Jeff authors an email newsletter twice a week and maintains a blog at WatsonInvested.com on investing, business and entrepreneurship which are read by thousands of successful investors.