Differentiate between a warranty deed and a quitclaim deed.

A warranty deed includes a guarantee from the grantor that they hold clear title to the property, meaning there are no undisclosed liens or encumbrances. This type of deed protects the buyer by offering certain assurances that if any title issues arise, the grantor is responsible for addressing them. In contrast, a quitclaim deed transfers whatever interest the grantor may have in the property, but it does not come with any warranties or guarantees about the title. Therefore, the grantee receives no assurances regarding the validity or extent of the ownership being transferred.

This fundamental difference makes the warranty deed a more secure option for buyers, while the quitclaim deed is often used in situations where the parties know each other and trust the transfer is legitimate, such as between family members or in divorce settlements. The other options do not accurately reflect these principles; for example, both types of deeds can be used for residential or commercial properties, and the permanence of the deed does not vary between the two types in this context. Additionally, both types of deeds can require notarization, depending on local laws, rather than one being more formal than the other.