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What is a warranty deed?

A warranty deed is a legal document to protect homebuyers

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Navigating the world of real estate can be quite challenging if you aren't familiar with all the jargon used in the industry — and most people aren’t. One term you may have heard is “warranty deed.” Below, we explain what a warranty deed is and how it differs from other types of real estate deeds.

What is a warranty deed?

A warranty deed is an important document that provides a high level of protection to purchasers. The deed “warrants” that the purchaser owns a particular property without any mortgages or outstanding liens.

There are several different types of warranty deeds, which we detail below. First, it’s important to understand how a warranty deed works and why it's essential to use this type of deed for certain kinds of real estate transactions.

How does a warranty deed work?

Warranty deeds are binding legal documents that serve to protect a property owner. These documents transfer a piece of property or group of properties from one party to another. The entity involved in the transaction can be either a person, group of people or a business.

Warranty deeds are used when a buyer is seeking financing for either title insurance or a mortgage. No matter which type of deed is used, it will include key information such as:

  • Date of the transaction
  • Parties involved
  • Property description
  • Buyer signatures

Warranty deeds are comprehensive documents that offer unique protections to property buyers.

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    Types of warranty deeds

    There are several types of deeds available for transferring ownership of a property. Each document has specific uses. Understanding each type of deed will help you find the right solution for your real estate goals.

    General warranty deed

    When people ask what a warranty deed is, they are almost always referring to a general warranty deed. This is the most comprehensive type. In it, the seller promises:

    • They are the property owner
    • They own the property free and clear
    • The title will withstand third-party claims of ownership

    General warranty deeds are the most popular option because they include so many covenants that offer protection for the buyer.

    Special warranty deed

    Special warranty deeds are not as thorough as their general counterparts. A special warranty deed only includes two guarantees: that the seller has received the title and that the property is not encumbered (contested).

    Quitclaim deed

    Quitclaim deeds are typically used to transfer property to a family member.

    Quitclaim deeds are used when a property has not been sold. These types of deeds facilitate the rapid transfer of land; they might be used during a divorce or when a family member gives property to a relative as a gift.

    Deed of trust

    A deed of trust is a binding legal document between three separate entities. In this type of transaction, a lender and borrower make an agreement to transfer a property to a “neutral” third party that will act as the trustee.

    Bargain and sale deed

    Bargain and sale deeds fall somewhere between specialty and quitclaim deeds in terms of protections they offer. This type of deed includes a warranty that the seller has the title to a piece of property. However, the seller does not promise the property is free and clear of any third-party claims.

    Statutory warranty deed

    Statutory warranty deeds are short-form versions of a general warranty deed. These deeds are available in some states, and they don't include a comprehensive list of promises; instead, the promises are outlined in state statutes, which makes them legally enforceable.

    Grant deed

    Grant deeds are one of the simplest forms of deeds used today. They include two simple promises: that the property is free of liens and that the buyer will have the right to transfer or sell the property.

    How to get a warranty deed

    There are several ways to get a warranty deed started. You can request a blank one from your real estate agent or download a template online.

    Remember, a warranty deed must list the transaction date and parties involved. It must also contain a thorough description of the property being sold and the signature of each buyer. Every warranty deed must be signed with a notary public present.

    Frequently asked questions

    What is the difference between a deed and a warranty deed?

    A regular deed is used to transfer ownership of a property from one person or business to another. It does not include any promises, covenants or other special concessions.

    A warranty deed does contain promises. These promises are made by the grantor (seller) to the grantee (buyer). The promises are meant to protect the buyer.

    What is the difference between a deed and a title?

    Often, people will use the phrases “deed” and “title” interchangeably. However, this is inaccurate and misleading.

    A deed is a legally binding written document that is used to declare a person’s ownership of a specific property. A title is a concept that constitutes ownership rights. It is not a physical document.

    What is the difference between a warranty deed and a quitclaim deed?

    Warranty deeds are some of the most comprehensive methods of transferring property from one party to another. They are used when property is purchased so that the buyer can obtain certain legal protections.

    Quitclaim deeds are a means to rapidly transfer ownership of a property without a sale. These deeds are often used in the case of divorce or when property is given to a family member.

    How does a warranty deed prove ownership?

    Warranty deeds prove ownership because they are signed by the previous property owner. The warranty deed should include a variety of promises, including statements that no other person or entity has claims against the property.

    Why should you get a warranty deed for protection?

    Warranty deeds include built-in protections that ensure no one else can claim your property. Without a warranty deed, you risk losing out on your investment.

    Bottom line: What is the purpose of a warranty deed?

    A warranty deed is a legal document that offers essential legal protection to buyers in real estate transactions. By using this essential document, you can protect your investment. If a seller is unwilling to complete a sale with a warranty deed, then you should be hesitant to close the deal. Make sure to protect yourself with the right legal documents when you buy real estate.

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