What is a Warranty Deed, And Should You Get One?

what is a warranty deed

Warranty Deed: What Is It, And Should You Get One?

A warranty deed, also known as a general warranty deed, is a legal real estate document between the seller (grantor) and the buyer (grantee). The deed protects the buyer by pledging that the seller holds clear title to the property and there are no encumbrances, outstanding liens, or mortgages against it.

Defination: A warranty deed is a type of deed where the grantor guarantees that he or she holds clear title to a piece of real estate and has a right to sell it to the grantee, in contrast to a quitclaim deed, where the seller does not guarantee that he or she holds title to a piece of real estate.

It’s important to note that a warranty deed does not actually prove the grantor has ownership (a title search is the best way to prove that), but it is a promise by the grantor that they are transferring ownership and if it turns out they don’t actually own the property, the grantor will be responsible for compensating.

Warranty Deed is a Legal Document

Warranty deeds are legal documents prepared by an attorney or title company. … In California, the grantees aren’t required to sign deeds. After a warranty deed has been signed, it must get filed on public record.

 warranty deed
  • A warranty deed is a document often used in real estate that provides the greatest amount of protection to the purchaser of the property.
  • The deed pledges or warrants that the owner owns the property free and clear of any outstanding liens, mortgages, or other encumbrances.
  • The grantor is responsible for a breach of any warranties and guarantees, therefore placing a great amount of risk upon the grantor.

How Warranty Deeds Work?

Warranty deeds provide the purchaser of the property with the highest form of protection, and are often used when a buyer wants to get financing for a mortgage or title insurance.

A deed is an important legal document that transfers property from one entity to another—often in the case of a real estate deal. A general warranty deed provides the buyer with the highest form of protection.

Warranty deeds are often put in place when a buyer is trying to get financing for a mortgage or title insurance. All deeds contain the date of the transaction, the names of the parties involved, a description of the property being transferred, and the signatures of the buyer.

Deeds may need to be signed in the presence of a witness and/or notary. The grantor is the rightful property owner and has a legal right to transfer title.

A warranty deed guarantees that:

  • The grantor is the rightful owner of the property and has the legal right to transfer the title
  • The property is free and clear of all liens and outstanding claims
  • The title would withstand third-party claims to ownership of the property
  • The grantor will do anything to ensure the grantee’s title to the property
  • If title problems arise after signing a warranty deed, the buyer can sue the seller as they’re legally responsible for any breach of warranty or guarantee.

It’s also important to point out that there are two types of warranty deeds that offer different levels of protection to the buyer and risk to the seller. These two types of deeds are general warranty deeds and special warranty deeds.

1. Special Warranty Deed

A special warranty deed or limited warranty deed only guarantees that no title problems occurred during the time the seller has owned the property. A special warranty deed is a legal document that transfers ownership of real property from one person to another.

Friends, a special warranty deed is a deed to real estate where the seller of the property—known as the grantor—warrants only against anything that occurred during their physical ownership. In other words, the grantor doesn’t guarantee against any defects in clear title that existed before they took possession of the property.

It will not protect against title issues that arose prior to the time the seller took occupancy. Consequently, it offers less protection to buyers, and more protection to sellers, than a general warranty deed, which is the most common option for selling or buying a property.

Read Also: Price Per Square Foot

Fill out the “grantee” section of the warranty deed. The grantees are the recipients, or receivers, of the property. Use the legal names of each grantee, and include current residences for each. Specify how the grantees are receiving ownership interest in the property.

used to transfer real property

2. General Warranty Deed

A general warranty deed is the most common type of warranty deed in the United States. It offers the highest protection to the buyer because it guarantees that there are absolutely no problems with the property – even dating back to prior owners.

general warranty deed is used to transfer real property from one person to another. This type of deed offers the greatest protection for the buyer and has specific requirements for what must be included in the document.

A warranty deed, also known as a general warranty deed, is a legal real estate document between the seller (grantor) and the buyer (grantee). The deed protects the buyer by pledging that the seller holds clear title to the property and there are no encumbrances, outstanding liens, or mortgages against it.

Friends, A general warranty deed covers the property’s entire history. It guarantees the property is free-and-clear from defects or encumbrances, no matter when they happened or under whose ownership. With a special warranty deed, the guarantee covers only the period when the seller held title to the property.

The general warranty deed is the standard instrument for home sales. Your notarized warranty deed is proof of ownership, and that the grantor transferred complete and clear title to you. A quitclaim deed also proves full land ownership—if the person who conveyed the interest to you had full ownership.

3. When Warranty Deeds Are Used?

Let’s start with the definition of a deed: “DEED: A written instrument by which one party, the Grantor, conveys the title of ownership in the property to another party, the Grantee.” A Warranty Deed contains promises, called covenants, that the Grantor makes to the Grantee.

Typically, a warranty deed would be used when you do not know the person you’re buying a property from. Warranty deeds may also be required when applying for a mortgage and when title insurance is used.

This differs from the quitclaim deed because title insurance is not needed for this type of deed. A quitclaim deed is used when a property is transferred without a sale, for example, from one family member to another.

Warranty deeds are typically used where the grantor and grantee are in the position of buyer and seller and are strangers. A warranty deed will almost always be required when the buyer is obtaining a mortgage and when title insurance is being issued.

Neither wills nor deeds are innately more significant. A will determines what happens to a property when its owner dies. … By contrast, a deed, once delivered, immediately effectuates a legal transfer of real estate.

How To Find Out Who Owns A Property

The 4 Major Types of Real Estate Title Deeds

  1. The General Warranty Deed. A general warranty deed provides the highest level of protection for the buyer because it includes significant covenants or warranties conveyed by the grantor to the grantee.
  2. The Special Warranty Deed.
  3. The Bargain and Sale Deed.
  4. The Quitclaim Deed.

4. How To Get A Warranty Deed?

The mortgage company usually prepares this deed as part of the loan package and delivers it to the title company for you to sign at closing. The title company is commonly the trustee to the deed and holds legal title to the property until the loan gets fully repaid.

Parties to a transaction are always free to prepare their own deeds. If you do so, be sure your deed measures up to your state’s legal regulations, to help avert any legal challenge to the deed later.

You can obtain a warranty deed through your real estate agent’s office or download an online template. All warranty deeds must include the date of the transaction, name of the parties involved, a description of the property being transferred, and the signatures of the buyers.

To make it legally binding, warranty deeds must be signed in the presence of a notary public. Generally, someone else cannot remove you from title without your consent and/or knowledge. You should speak to a local real estate attorney to see how to return your name to title and how it was removed in the first place.

One way to get a warranty deed to the property you acquired via a foreclosure where you got a quit claim deed for it is to simply deed the property to yourself or a trust that you created as a grant (warranty) deed.

The easiest way to prove your ownership of a house is with a title deed or grant deed that has your name on it. Deeds typically are filed in the recorder’s office of the county where the property is located.

The two parties involved in a warranty deed are the seller or owner, also known as the grantor, and the buyer or the grantee. Either party can be an individual or a business, and are often strangers to each other.

5. warranty deed vs quit claim deed

A quitclaim deed only transfers the grantor’s interests in a piece of real estate. It does not create any warranties on the title. Only whatever part of the land the grantor owns, if any, will transfer to the grantee. A warranty deed contains a guarantee that the grantor has legal title and rights to the real estate.

What is a Quitclaim Deed?

Quitclaim Deeds are used when the transfer of ownership in the property does not occur as the result of a traditional sale. For instance, Quitclaim Deeds are common when real estate is conveyed through a Will or as a gift, when property is placed in a trust, or to distribute property as part of a divorce settlement.

They’re also common when someone wants to sell property but they’re not entirely certain what the property boundaries are or whether any other claims can be made on the property.

Quitclaim Deed

Quitclaim Deeds contain no guarantees of any kind, which means that you could buy a property, receive a Quitclaim Deed, and later find out that the person you bought it from wasn’t legally able to sell you the property at all.

When it comes to a Warranty Deed vs. a Quitclaim Deed, the central difference lies in the guarantees.

Under a warranty deed, if it turns out that the property is not what the seller promised or there’s an uncleared lien or other block to the title, the buyer can sue the seller and recover damages. But if the property was conveyed through a Quitclaim Deed, the buyer has no remedies.

For this reason, a Warranty Deed should generally be viewed as more valuable than a Quitclaim Deed, though there are some special circumstances where that is not the case.

6. warranty deed vs deed of trust

The warranty deed transfers the property’s ownership from the current owner to the new buyer, while the deed of trust ensures the lender has interest in the property in the event a buyer defaults on the loan. However, they will both be filed as public records after the purchase is complete.

The deed of trust document is prepared by the lender, and the borrower signs it at the closing of the mortgage loan. Some states use the deed of trust, while others use a mortgage document. Both of these act as the lender’s security instruments, only slightly differently.

The deed of trust explains the complete details, terms and conditions of the mortgage loan. This includes the principal balance amount, expected maturity date and interest rate information.

It also names a third-party trustee who is empowered to initiate the foreclosure process for the lender, if necessary. A mortgage document also explains the loan in detail, but it acts to place a lien on the property rather than naming a third-party trustee.

7. Is a Deed of Trust and Warranty Deed the same?

Both a warranty deed and deed of trust are used to transfer the title of a property from one person to another. However, the difference between these two contracts is who is protected. As you now know, a deed of trust protects the beneficiary (lender). A warranty deed, on the other hand, protects the property owner.

The warranty deed acts to transfer property ownership from the current owner – the “grantor” – to the new buyer, the “grantee.” By signing the deed, the grantor gives his rights to the property to the grantee.

what is a warranty deed

A deed of trust is a type of lending document stating the borrower’s evidence of debt. The document secures the lender’s interest in the property by naming a “trustee” – a third party who has the right to sell the property should the buyer default.

For example, when you purchase a house, the seller signs a warranty deed granting you ownership. You then sign the deed of trust as a promise to repay the lender for the loan.

8. Security deed

Security Deed means the security deed dated on or about the Series Issue Date of the ETC Securities entered into as a deed by the Issuer, the Trustee and any other parties thereto by the execution of the Issue Deed and in the form of the Master Security Terms (as amended and/or supplemented by the Issue Deed) and as such Security Deed is amended, supplemented, novated or replaced from time to time.

Most people utilize a mortgage loan to finance the purchase. … When the transfer is complete, the seller must sign a warranty deed and the buyer signs a type of security instrument with intent to repay the loan.

The state of Georgia calls this instrument a security deed, while others call it a mortgage or deed of trust. A satisfaction of mortgage is a document that confirms a mortgage has been paid off and details the provisions for the transfer of collateral title rights.

A security deed transfers legal title to a lender during the term of the security of a note in connection with a mortgage. Release Deed (Reconveyance) A reconveyance deed removes the original lien that a lender-placed on the property.

A Security Deed can have many names. In some cases, it’s known as a Deed to Secure Debt, Warranty Deed, or even a Loan Deed. It provides a full and direct legal title transfer from the borrower to the lender, leaving the equitable title with the borrower. … The lien is removed once all loan payments have been completed.

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