Real Estate Deal Analysis & Advice

Types of Deed & Ways to Take Title: Everything Investors Should Know

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Before I got my real estate license, I had bought and sold 10 properties. I had never given any thought to the type of deed conveyed. In fact, I didn't know there were different types of deeds. I just assumed once I bought the property, I owned it free and clear. Lucky for me, my lender has always required me to purchase title insurance in order to secure the mortgage.

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The 5 Types of Deed

There are five types of deed: General Warranty Deed, Special Warranty Deed, Quit Claim Deed, Bargain and Sale Deed, and Grant Deed.

The General Warranty Deed offers the most amount of protection to the buyer — the seller is offering a guarantee that there will be no problems with the title, no claims, no liens, no clouds on the title from the time the buyer makes the purchase, all the way back to the time the property was built.

The Special Warranty Deed is less secure, with the seller only guaranteeing that the property is free from liens or clouds on title during the time they owned it. This isn't a real big deal if the seller has owned the house for a long time, but if the seller has only owned it for a short period of time, they really aren't offering you much of a guarantee at all. The house I live in was purchased out of foreclosure, and the bank offered me a Special Warranty Deed. I didn't feel particularly secure because the bank only owned it for four months.

Related: What is Title Insurance? The Real Truth About How Title Insurance Works


The Quit Claim Deed is used mostly for transactions like divorce, when you wish to separate assets. The person named on the Quit Claim Deed is literally quitting their claim to the property, whatever their claim may be. There is usually no monetary exchange with this type of deed, and it offers little protection.

The Bargain and Sale Deed is used mostly for the sale of court-seized residential property. It conveys title from seller to buyer, but does not guarantee that the seller owns the property free and clear. It is similar to the Quit Claim Deed, except the property is sold rather than transferred.

The Grant Deed is used in residential real estate sales. It conveys the property from seller to buyer, guaranteeing that the seller owns the property and has the right to sell, but does not guarantee that the title may be free from cloud.

The different types of deed you receive at closing should influence what type of deed you convey when you sell the property. Obviously, you want the most protection for your ownership of the property and want your buyer to have confidence in your ability to convey the property free and clear.

All of that may seem like a big deal, but having title insurance sort of wipes all concerns out. Almost any lender is going to make you purchase a title insurance policy, and the title insurance companies make sure there are no clouds on title. So all that information I just gave you pretty much doesn’t matter.

Unless you are paying cash for these properties. And forego title insurance.

Title insurance isn't necessary in every case. If you know the property's history, perhaps it isn't worth your money. But there have been instances where the person selling the property doesn't have the right to sell, and somehow this slips through the title search. The title company who issued the Title Insurance Policy has obligated themselves to make it right to all parties, so they pay to fix it. While this isn't a common problem, the more distressed a property is, the more chance there is for an unrecorded lien to show up after closing.

Title insurance prices vary from state to state, but a good estimate is 0.5% of the selling price as the policy cost. When you go to sell the property, your buyer will want a clean title. And if they are getting a mortgage, their lender will require title insurance.

So now that we have the deed explained, let’s look at all the different ways to take title to a property.


4 Ways to Take Title to a Property

Tenancy in Common, Joint Tenancy, Tenancy by the Entirety and Ownership in Severalty are the four ways to take title to a property.

Tenancy in Common allows for multiple owners of a property, each with a percentage of ownership rights to the entire property. The percentage does not have to be equal, but most commonly is. If four people own a property, they typically will have a 25% stake. Their share can be sold, mortgaged or conveyed without the consent of the other owners. Tenancy in Common does not have the right of survivorship, meaning the 25% interest is not automatically conveyed to the other 3 owners upon death.

Joint Tenancy allows for multiple owners of a property, each with an equal percentage of ownership rights to the entire property. One Joint Tenant isn’t allowed to have a larger share of the property than any other. Joint Tenancy is similar to Tenancy in Common, but most importantly has the right of survivorship, which means that the percentage owned by a person who passes is equally divided between all other Joint Tenants. It cannot be willed or sold to someone other than the other Joint Tenants.

Related: Different Types of Deeds and How to Use the Right One

Tenancy by the Entirety is like Joint Tenancy, but there can only be two tenants, they must be married, and they cannot sell or convey their share without consent from the other tenant.

Ownership in Severalty is when there is a single person or entity that owns the property. Severalty comes from the idea that the owner is “severed” from other owners.

Knowing the different ways to take title to a property and knowing the different deeds offered can help you make an informed decision on how you want your property handed over to you. It can save you a lot of hassle and even more money to get the title and deed the way you want it the first time you close.

What different deeds and ways of taking title do you have experience with? Any questions?

Leave a comment below!

Mindy Jensen has been buying and selling homes for more than 20 years. She buys houses, moves in, makes them beautiful, sells them, and starts the process all over again. She is a licensed real estate agent in Colorado, author of How to Sell Your Home, and the community manager for BiggerPockets, where she helps new and experienced investors learn the proper ways to invest in real estate to grow their wealth. Mindy is an alumnus of the School of Hard Knocks and will happily share her experiences with anyone who asks. When you can get her to stop talking about real estate, you can find her on her bike or adventuring in the beautiful mountains of Colorado.
    Alex Gerasimov Rental Property Investor from Yukon, OK
    Replied over 5 years ago
    Very informative Article!! Thank you so much. Is there a form of a title that automatically transfer property ownership to another person on the title in case of death of the one of the owners? How is the equity shared between two title holders. For example: can i take a full equity loan in there is another person on the title? Thank you
    Mindy Jensen BiggerPockets Community Manager from Longmont, CO
    Replied over 5 years ago
    Thanks for reading, Alex. Joint Tenancy is a form of title where each joint tenant owns an equal share of the property. Four Joint Tenants (JT) will each own 25% – there cannot be an uneven split. If JT3 dies, his or her share is divided equally among the remaining JTs. It cannot be willed by JT3 to someone else. I am not entirely certain about the equity. You own a percentage of the property, but have the use of the entire property. It isn’t as though you only can use 25% of the property…
    Manuel Diaz from Boston, Massachusetts
    Replied over 5 years ago
    Great article!I am learning so much. One question: can a quit claim deed be used when a parent relinquishes a property to their child? Or is it just used to separate from someone who also had a claim on the property such as a spouse?
    Replied almost 5 years ago
    It can. However, if your child ‘leaves’ and doesn’t pay the mortgage or property taxes etc the Parent, who is still on the note and Mortgage are liable, and it can affect their credit rating! Also, if the child leaves without selling the parents NO Longer have the right to sell the property. The child will need to have a Will stating what is to be done with property upon their death… Quitclaim deeds are illegal in many states.
    Mindy Jensen BiggerPockets Community Manager from Longmont, CO
    Replied over 5 years ago
    Thanks for reading, Manuel. The quit claim deed transfers whatever ownership the person who is quitting their claim has on the deed. They don’t have to have any ownership of the deed to sign a quit claim. I could sign a quit claim deed on YOUR house over to you. It is absolutely worthless, because I don’t own any portion of your house. I am just “quitting” my claim to it, so whatever rights I had are now gone. A parent can quit claim their title to their child. It removes all the parents rights to the property. I am not sure if this can be done after death, as part of settling an estate. That is an attorney question for sure.
    Daniel Ryu Investor from Irvine, CA
    Replied over 5 years ago
    Nicely written, Mindy. I had a question – so let’s say you buy with Special Warranty Deed and you purchase the title insurance and you sell it to a 3rd party. Does the 3rd party receive the property as a “General Warranty Deed”? Thanks ^^
    Mindy Jensen BiggerPockets Community Manager from Longmont, CO
    Replied over 5 years ago
    You choose the type of deed you are offering to your buyer. If you only received a Special Warranty Deed, it would be in your best interest to also convey a Special Warranty Deed. The SWD guarantees the property to be free from issues during the time you owned it. You didn’t get the guarantee that it was free from issues since the dawn of time, so you probably don’t want to guarantee that to the buyer.
    Andrew Syrios Residential Real Estate Investor from Kansas City, MO
    Replied over 5 years ago
    Great refresher! Almost every deed I see from an REO is a special warranty deed. I usually feel fine about those (when from a bank) because the foreclosure wipes out most liens and they should (I believe) have to report any liens left on the property like tax liens. We haven’t had a problem with that yet at least.
    Mindy Jensen BiggerPockets Community Manager from Longmont, CO
    Replied over 5 years ago
    Thanks for reading, Andrew. The house I live in was an REO. I checked for the purposes of this article, and discovered I received a Special rather than General from them. I sure hope all the liens were wiped out in the foreclosure. It’s been two years, so I think I am safe, but just to be certain, I purchased title insurance.
    Sean Williams Real Estate Agent from Louisville, KY
    Replied over 5 years ago
    All fantastic, easy and clear explanations. In regards to title insurance I ALWAYS recommend this…for the cost it’s a no brainer versus the cost if you needed it and didn’t have it! Most residential title searches only go back 30 years so if there was as defect, which is unlikely but still possible, past 30 years a typical title search would not discover that defect!!
    Richard Guzman
    Replied over 5 years ago
    Hi Mindy, Great article to read, so I guess a Quit Clam deed is something my grandmother is trying to do for me but I am concerned about receiving the deed (property) as a gift (tax?) or possibly purchasing the deed for a low amount like 5k but then the county will flag it as an unusual transaction? Joint tenancy may be a better option — please let me know your thoughts when it comes to this family affair!! Thanks —
    Georgia B
    Replied over 4 years ago
    It’s really interesting that the company that issued the Title Insurance Policy is obligated to make it right when someone purchases a title that the previous owner didn’t have the right to sell. I would love more information on how to tell if the person selling the property has the right to sell it. I guess the Grant Deed is one way, but it would be nice to have further proof or legal documentation that the property is theirs to sell. I learned quite a bit about how titles and deeds work from this article–thank you!
    Priyanka K. Rental Property Investor from Dallas, TX
    Replied about 2 years ago
    Great article! So if we get a title insurance with a Special Warranty Deed, is our money safe or could there be other issues? Do lenders accept Special Warranty Deed when refinancing?