Owners' Expectations

• When making a major financial purchase, like a home, car or boat, the buyer wants legal assurance that the buyer actually owns the property and that the seller can transfer a "clean" title. The buyer does not want subsequent surprises, such as another person claiming title to the property, or that the property might later be seized and sold to pay debts of the seller.
  
  The seller wants to be relieved of all responsibilities and liabilities for the property after its sale.
  
  

Conditions of Sale

• The buyer and seller agree on a price. In exchange for payment, the buyer gets access to the property and a deed, which states the buyer's degree of ownership of the purchased property.
  
  If the seller has full, unencumbered ownership, the seller can transfer a "clean" title to the buyer.
  
  The buyer wants a guarantee of "clean" title. If, in the hands of the seller, the property is security for a debt owed by the seller--for example, a mortgage--the buyer wants the seller to remove/pay all limitations on the title before the sale is completed.
  
  If the seller had a mortgage, the lender wants repayment in full before title is transferred to the buyer. If the sale price exceeds the amount of the seller's still-unpaid mortgage, the lender will be repaid from the sale proceeds at closing. Then, both lender and buyer are satisfied.
  
  If the seller owed overdue real estate taxes to the city at the time of sale, the buyer wants full assurance that those back taxes will be paid by the seller before the sale is consummated.
  
  Sometimes the property or the sale price is so attractive, the buyer may be willing to accept a less-than-clean title from the seller. For example, if the lender agrees, the buyer can accept liability for the seller's mortgage, or agree to pay the seller's tax debt as a condition of sale.
  
  The buyer does not want to discover any hidden, unpaid debts by the seller after the sale is finished.
  
  

Transfer of Title

• A deed explains the conditions of ownership when transferred from seller to buyer. The particular form of deed depends on the title actually being transferred. Important considerations are whether the title is clean and without encumbrances.
  
  

General Warranty Deed

• Buyers prefer a general warranty deed, in which the seller warrants or guarantees to be the current owner with no limitations on title. If, later, a limitation is discovered under this type of deed, the seller accepts responsibility and financial liability for any damage to the buyer.
  
  

Quit Claim Deed

• Sellers often prefer this form of deed. The seller makes no guarantees or promises, except to relinquish all claims of ownership. A buyer receives no protection for what is not yet known.