Understand what a deed really is.
Helping you make better decisions
Most people have heard about deeds and know that they are connected to property in some way, but a lot of people don’t really understand what a deed is. So, what exactly is a deed? A deed is a written, legal instrument that conveys an estate or interest in real property when it is executed and delivered. But what does that mean? Once a deed is signed and delivered, a transfer of property occurs. It is usually best to have that deed recorded also (although a lawyer can advise when it may not be best to do so).
There are several types of deeds. The primary types of Arizona deeds include Warranty Deed, Special Warranty Deed, Quitclaim Deed, Deed of Trust, and Beneficiary Deed.
Warranty Deed
A Warranty Deed expressly guarantees the grantor has good, clear title and also has several covenants which guarantee the quality of title, including, for example, the right to convey the property and defense of the title against all claims. This is usually the preferred deed used when real estate is purchased from a stranger.
Special Warranty Deed
A Special Warranty Deed is different from a Warranty Deed in that it does not warrant against defects or encumbrances not caused by the person granting the deed, so if a defect was caused by the actions of a prior owner, the person receiving the deed (and property) cannot recover against the person who gave them the deed (and property). It offers slightly less protection than a regular Warranty Deed.
Quitclaim Deed
A Quitclaim Deed transfers interest in a property but does not warrant the extent of the grantor’s interest or whether title is even valid. These deeds are useful in clearing up title problems (name changes, etc.), transferring property in a divorce between spouses, or in informal transactions between family or friends.
Deed of Trust
A Deed of Trust is similar to a mortgage. Title is transferred to a Trustee until the loan is paid in full, at which time title is transferred to the borrower. Trustees have only one power over the property- the power of sale if a borrower defaults.
Beneficiary Deed
A Beneficiary Deed is an estate planning tool in Arizona. It allows a person to directly transfer their home to friends or family after death without the property needing to go through Probate. This deed is entirely revocable during the grantors lifetime, and it does not convey any interest in the property until death. This means the owner still pays all taxes, still can sell the property, still can refinance the property, and still can take other actions with the property.
