The Warranty Deed, What it is and how to use it

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The warranty deed transfers the ownership of an item of real property from a grantor (seller) to a grantee (buyer). [0] . The seller is guaranteed to own the property in full and free. The warranty deeds usually include important information such as a description of the property and important details. tax liens . The […]


The warranty deed transfers the ownership of an item of real property from a grantor (seller) to a grantee (buyer).


. The seller is guaranteed to own the property in full and free. The warranty deeds usually include important information such as a description of the property and important details.


tax liens


.


  • The general warranty deed is commonly used in residential real estate transactions and offers the greatest protection for the purchaser.


  • The special warranty deeds are used more in temporary cases, like bank ownership.


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    Cornell Law School. Deed. Deed.


    .

  • You’ll probably use a guarantee deed when you purchase or sell your home. You might choose a quitclaim when you are dividing property or inheriting property.


Pros and Cons of Warranty Deed


Guarantees that the owner has a legal right to sell the property.


Can be costly — from around $100 to several thousand dollars — depending on the transaction.


Shows that the title has no outstanding debt claims or liens.


Buyer protection differs between general and special warranty deeds.


Can be used to prove ownership to lenders.


Does not replace title insurance, which may be necessary with a special warranty deed.


Different types of warranties


Warranty deed


The most common type of deed used for buying residential properties is a general warranty deed. The deed ensures that no tax or creditor liens are attached to the property and that any future claims will be compensated by the seller.


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  • The general warranty will protect the buyer from previous problems with the property. This includes fines that were imposed by several prior owners.


  • This type of document is often required by lenders to prove ownership and secure funding.


Deed of Special Warranty


The seller is only responsible for the period during which the special warranty deed applies. The deed does not make any promises regarding outstanding issues that may have been left by previous owners.


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  • This is a way to say that, if the previous owner did not pay his homeowner association dues, then it’s up to you, as a new owner, whether or not they paid.


  • A deed of this type is used more often in special circumstances, like when a bank temporarily takes ownership of property by foreclosure or commercial real estate.





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Requirements for warranty deeds


Although state laws vary, warranty deeds should include:


  1. The legal description of the land.


  2. Name and address of the grantor or seller.


  3. Name and address of the grantee, or buyer.


  4. An affirmation that the grantor owns the property legally and that there are no outstanding claims or liens against the title.


  5. An intent statement to transfer the property from the grantor or grantee to the recipient.


  6. A special warranty deed states that only the grantor can be held responsible for his or her own ownership period.


  7. Notarization performed by a public notary or another official.


Warranty deed vs. quitclaim deed


What is the main difference between warranty deeds and quitclaim deeds? It’s who uses them, and what protection they provide to both buyer and seller.


  • They are used to protect both parties from a breach of contract, and vary depending on the type (special or general) of warranty deed. There are clauses in warranty deeds to protect both parties against contract breaches. The variations depend on whether the warranty deed is special or general ).


  • The Quitclaim Deed transfers property between trusted parties “as-is” — for example, adding a spouse to the title — with no guarantee of the ownership or the absence of outstanding claims and liens.


    . They don’t even require


    Title insurance


    As warranty deeds.