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Types of Deeds | Real Estate Exam Prep Videos - YouTube
Channel: The Real Estate Classroom
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[Music]
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everybody my name is Paul for Chesky and
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welcome to the real estate classroom
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YouTube channel hey before we get
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started do me a favor give this video a
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thumbs up hit that red subscribe button
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and click on that little notification
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bell alright in today's video we're
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going to discuss types of deeds now
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there's probably about a dozen or so of
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the types of deeds we're going to
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discuss and you need to know these for
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your real estate licensing exam very
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important now understand just a little a
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little review here I did another video
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that outlined the basics of deeds and
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what contents or what essential elements
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must be in a deed for it to be valid if
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you have not previewed that video please
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go and watch that video before you go to
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this video and I'm gonna leave a link
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right up here in your upper right hand
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corner of your screen that's a link to
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the video watch that one then come back
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to this one and if you've watched that
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video you will have learned that the
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deed is the proof or the evidence of a
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transfer of title or a conveyance of
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title the other thing that the deed does
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it represents the quality of the legal
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interest what we call the quality of the
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estate the type of D determines quite
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frankly the quality of the estate and
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you're going to find out what that
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exactly means in the video here so I got
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a PowerPoint ready to go so let's go
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over the computer and we'll go through
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the different types of Deeds all right
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so let's jump to the different types of
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Deeds that you're gonna have to know if
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you want to pass your real estate
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licensing exam now the first type of
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deed I'm going to talk about is what's
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called a general warranty deed or
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sometimes called just simply a warranty
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deed
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now the grantor guarantees the grantee
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title now remember the grantor is the
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seller or the person that's it's
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conveying title and the grantee is the
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person that's receiving the title
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usually the buyer all right so the the
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general warranty B does a lot of things
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and you really got to know the breakdown
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and the contents of this deed number one
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it conveys remember conveyances simply
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means transfer it conveys the highest
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and most complete ownership the grantor
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also guarantees free clear marketable
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title even for title issues that pop up
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prior to their ownership and it also
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includes certain warranties all right
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the first time at warranty I want to
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talk about is quiet enjoyment and as you
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can see I put the definition to all of
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these warranties on your screen quiet
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enjoyment is a covenant that promises
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that the grantee or the tenant of an
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estate in real property will be able to
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possess the premises with peace without
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any disturbances by hostile claimants
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meaning they're going to be able to
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enjoy that property without a previous
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owner basically making a claim against
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their interest in that property number
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two covenant of season now this covenant
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promises that no one else has any
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conflicting promissory interest either
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present or future it's basically saying
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that when the grantor uses this deed to
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transfer convey title that they're
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assuring the grantee that there's going
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to be no one that pops up that says hey
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this is my property or or I have some
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ownership interest in this property
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number three free from encumbrances
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meaning free and Claire refers to the
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ownership without any legal encumbrances
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such as a leaner a mortgage basically
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says that hey grantee you're going to
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receive the title to this property free
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and clear of all liens and encumbrances
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number four the right to convey title
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this means the grantor has the legal
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right and is legally entitled to
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transfer the property to the grantee
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number five covenant of further
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assurances it's basically a promise that
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upon demand by the grantee the grantor
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will execute any additional documents in
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the future should it be necessary to fix
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any defects in the grantees title now
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this does happen occasionally and
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typically it's a administrative error
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there was a misspelling on the deed or
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there was a an incorrect legal
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description or a non complete legal
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description those type of things
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and if the grantor is giving a general
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warranty deed or a warranty deed to the
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grantee then they make this affirmation
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they make a promise that if there's a
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future issue they will correct it and
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then the last one is covenant of
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warranty we call this indemnification
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this is basically a guarantee to the
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grantee the title will always be good
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and that the grantor will compensate the
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grantee if there is any issues that are
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found later after closing you know if
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there's a title defect or a lien against
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the property those type of things its
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indemnification it's it's the grantor is
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saying I will make the grantee whole
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from any financial loss so that is a
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general warranty deed it guarantees the
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grantor is guaranteeing good title the
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next deed I want to talk about is a
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special warranty deed the special
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warranty deed basically does all the
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same stuff that a general warranty deed
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guarantees title it has all the
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warranties but there is one exception
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the seller or the grantor is only saying
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I will give all of these guarantees only
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during the period in which I owned the
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property unlike the warranty deed where
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the grantor is giving that guarantee all
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the way back even during the prior
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ownership the special warranty deed just
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says that it's only getting the the
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grantor is only gonna make those
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guarantees during that grandtourist
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period of ownership by the way banks
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overwhelmingly used a special warranty
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deed when they are selling when they are
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selling bank foreclosed properties
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the next deed is the grant deed now the
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grant deed looks a lot like the warranty
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deed the difference is the grantor is
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not guaranteeing title they're implying
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it's basically an opinion they're saying
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listen I will give you all of these
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things because I am implying that I have
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all these things to give you I'm only
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doing this or giving you the implication
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of good title during my time of
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ownership but the one thing that it does
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it does lack is the guarantee that's why
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we want to make sure that if we're going
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to receive as a grantee if we're going
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to receive title to property using a
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grant deed we want to make sure that we
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have an abstract updated or that we that
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we have title insurance a bargain and
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sale deed now a bargain and sale deed
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offers absolutely no warranties or
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indemnification and unlike the quitclaim
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deed which we're going to talk about
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next the Grand Tours do acknowledge that
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they have ownership they just don't know
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how much so they're saying listen I know
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I have some ownership interest and I
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know I know I possess ownership interest
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but I don't know what kind not what the
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quality is or how much but I do have
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some and you can have it and there's no
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guarantee of clear free marketable title
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so if you receive ownership or the
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interest of a grantor that used a
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bargain and sale deed you could
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literally be getting ownership to
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property that has all kinds of liens and
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encumbrances against it
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a quitclaim deed now a quitclaim deed
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again offers no warranties the grantors
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do not acknowledge that they even have
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any type of ownership interest in the
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property there's no guarantee a free
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clear marketable title and they
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basically just say listen I think I
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might have ownership but I don't even
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know that for sure but if I do then here
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you go you can have it there's an old
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wise tale that said some somebody one
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time in New York
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quit claimed there
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our interest in the Brooklyn Bridge and
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the the grantee discovered that well the
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grantor absolutely had no inertia no no
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ownership interest whatsoever in the
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Brooklyn Bridge so there was no
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conveyance of any title and it was
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perfectly legal to do because the
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quitclaim deed is not acknowledging they
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even have ownership and it's kind of
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interesting because if you ever bought a
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railroad owned property they use the
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quick the quitclaim deed to convey title
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so you'd want to make sure that you get
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a title search done in title insurance
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for sure alright so another use of the
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quitclaim deed it's commonly used in
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divorce proceedings where spouse a is
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awarded the property through the divorce
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proceedings and spouse B then uses a
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quitclaim deed to transfer their
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ownership interest to spouse a and it's
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also used in some jurisdictions to
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correct any kind of discrepancies that
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are found on on the previous deed that
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conveyed title for example maybe an
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inaccurate legal description a gift deed
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a gift deed is unique to those that are
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conveying title to property by gift so
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if you're going to gift a piece of
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property to a non-profit let's say your
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church in that case you would use a gift
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deed the interesting thing about the
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gift deed and it's unique to the gift
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deed and that is the consideration part
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of the deed now from previous videos if
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you've watched them you've you know that
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consideration is an essential element of
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not only the deed but also the contract
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and it basically means the consideration
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means that there's an offer of something
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of value typically it's money it doesn't
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have to be it could be a pound of a dirt
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it could be diamond stocks most of the
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time it's money but it's something of
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value and in most deeds that's expressed
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in the deed as money in the amount of
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typically one dollar that's the most
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common dollar amount if a gift deed is
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used at bay
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basically the consideration paragraph is
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going to say for the love and affection
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of you know for the love and affection
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of a son or daughter for the love and
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affection of my church that's actually
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how it'll be worded and it's very unique
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to the gift deed the deed of surrender
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it's used in place of a quitclaim deed
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to convey interest of a life estate or a
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remainder mens interest so if one two
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three main street there is a life estate
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in place there's a person the life
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tenant that's there living in the
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property they have ownership interest
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and there is also a remainder man who
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has a future ownership interest well
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let's say everybody agrees to sell that
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property to somebody else
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so to convey the interest of the life
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tenant and also the remainder man who
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has the future interest then we'll we'll
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use a deed of surrender now if you don't
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understand what a life estate is up in
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the upper right hand corner of your
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screen I'm gonna leave a link to a video
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where you can you can watch the video
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that talks about what a life estate is
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and how that works
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deed of release we use this when a
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mortgage that's being used as collateral
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is paid in full it clears the title from
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that debt it's called a deed of release
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correction deed now you need to know
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that a correction deed can also be
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called a Reformation deed or a deed of
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confirmation the real estate licensing
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exam may use those three terms
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interchangeably and we use a correction
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deed to correct any errors such as miss
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billed names on the deed that was used
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to convey title errors in the legal
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description or some other omission on
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the remember on the deed that was used
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to convey title from the grantor to the
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current grantee session deed this is
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specifically used to transfer title of
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street rights
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from a developer or sub divider to a
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governmental entity such as a county or
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a state so when a developer goes in and
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they develop a subdivision now at some
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point the county or the city is going to
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come in and take over control of those
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streets maintenance snow plowing all of
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that stuff so we got to have a way to
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transfer that title interest and a
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session deed is used to transfer the
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street rights from the sub divider to
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that governmental entity sheriff's deed
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also known as a referee's deed a
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sheriff's deed is used to transfer title
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for real estate or real property that's
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been sold at public auction all right so
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typically we see this in mortgage States
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not deed of trust States but mortgage
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states where the the bank needs to
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foreclose on a property because the
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borrower defaulted it goes to a sheriff
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sale and the sheriff auctions off the
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property on behalf of the bank
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all right so title and that property
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transfers by way of a public auction now
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because the sheriff is acting on behalf
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of the benefit or on behalf of the
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public for the benefit of the public
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there are no warranties or
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representations of the condition of the
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title so whoever purchased that property
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they they're going to get a sheriff's
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deed and there may be all kinds of liens
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attached to that property so typically
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if you go to a sheriff's auction the
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people that do this regularly they they
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have relationships with title companies
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and abstract companies and they will
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research the title before they actually
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even go to the auction that's typically
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what happens but buyer beware if you
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show up and you think you get a good
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deal you may end up getting property
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that's leaned up a tax deed now again
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with a tax deed and the sheriff's deed
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there are no warranties or
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representations to the condition of the
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title so investors are going to need to
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do their research before going to the
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tax deed auction personal representative
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or executor z-- deed this is when
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somebody dies and there's a personal
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representative or a
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of the state that is tasked with selling
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off the property so if if there is a
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property that's sold in titled transfers
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a personal representative deed or an
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executor z' deed is going to be used and
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technically this is considered a
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judicial deed because the executor or
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the personal representative is signing
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the deed under the approval of the court
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so that's why it's called a judicial
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deed all right let's take a look at
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bullet point number three because it's
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very unique to these deeds right here
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the deed requires the deed to state the
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full purchase price now in the
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consideration part of the deed we have
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to list what the consideration was in
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exchange for the conveyance of title
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almost always it's one dollar that's
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what we put in there but because this is
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an executor deed or a personal
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representative deed we actually have to
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put the full amount of the purchase
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price and the reason we have to do that
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is because of the estate tax provisions
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or the estate tax requirement so it's
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the only deed that absolutely requires
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the full purchase price to be put in the
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deed under the considerations section of
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that deed guardians deed if there is a
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minor that has ownership interest in
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land or real property I should say and
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for whatever reason that that title
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needs to be conveyed to somebody else
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a minor does not have the legal capacity
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to do that and if there's a legal
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guardian in place then there the legal
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guardian is going to sign on behalf of
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that miner and the type of deed that's
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going to be used as a Guardians deed and
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then the last one is the directors deed
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we use the directors deed to convey
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interest in real property when a public
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agency or a public entity cells off
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surplus land that that governmental body
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owns they're going to use a director's
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deed don't the other thing that the real
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estate licensing exam likes to ask are
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questions that want you to solicit
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meaning for this scenario what type of
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deed is best and I use the term best
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because there may be two potentially
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right answers but they want to know
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which is the best answer and that's why
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you have to know the details of each one
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of these types of Deeds alright if you
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have more study that you want to do
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check out this video to my right and
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please if you have not subscribed to our
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channel yet please go ahead and click on
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the little circle right there I would
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appreciate that I will see you in
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tomorrow's
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