Warranty Deed Explained

In contrast to a quitclaim deed, where the seller does not guarantee that they have clear title to a piece of real estate, a warranty deed assures that the grantor (seller) has the right to transfer it to the grantee (buyer). A universal warranty deed protects the grantee from title flaws that can occur at any time, all the way back to the property’s beginnings. A special warranty deed solely protects the recipient from title defects caused by the grantor’s actions or omissions.

Warranty Deed Process

A deed is a legal instrument that transfers property from one entity to another, most commonly in a real estate transaction. A general warranty deed offers the buyer the most comprehensive protection. When a buyer is trying to secure a mortgage or title insurance, warranty deeds are frequently used.

The date of the transaction, the names of the persons involved, a description of the property being transferred, and the buyer’s signature are all included on all deeds. Signing deeds in the presence of a witness and/or notary may be required.

Types of Warranty Deeds

General Warranty Deed – The grantor is liable for any warranties and guarantees that are breached, even if the breach occurred without their knowledge or while the grantor was not the owner of the property. The grantor of a general warranty deed assumes a significant degree of risk because they are accountable for any breaches that occur much outside their knowledge or ownership of the property.

Special Warranty Deeds – Special Warranty Deeds are less comprehensive than their normal counterparts, as they only carry two warranties:

• The grantor attests to having obtained the title.

• The grantor guarantees that the property was free of encumbrances during his or her ownership.

A special warranty deed does not shield the grantor from claims made before the grantor receives title. Special warranty deeds are more common in commercial real estate.

The Quitclaim Deeds – Quitclaim Deeds are a legal document that transfers property from one person to another. This sort of deed does not require title insurance. A quitclaim deed, unlike a warranty deed, is used when a property is conveyed without a sale.

Benefits of a Warranty Deed

Some of the covenants and protections granted through a warranty deed include:

• The grantor certifies that they are the legal owner of the property and that they have the authority to transfer title.
• The grantor guarantees that the property is free and clear of all liens and that no creditor utilizing it as collateral has any existing claims on it.
• There is a guarantee that the title will withstand any claims to the property by third parties.
• The grantor will do everything it takes to restore the grantee’s property title.