What is a warranty deed?
A warranty deed is a legal document used in real estate transfers that guarantees the seller (grantor) holds clear title to a property and has the right to transfer it. It protects the buyer (grantee) by making the seller legally responsible for title defects or claims that arise after the sale—even if those defects originated before the seller’s ownership (depending on the type of warranty deed).
How a warranty deed works
- The seller delivers the warranty deed to the buyer at closing.
- The deed includes a legal description of the property and is signed and witnessed according to state law.
- A title search is typically performed before closing to identify existing liens or other title defects.
- If a covered title defect emerges later, the buyer can hold the grantor liable under the warranties stated in the deed.
- Lenders commonly require warranty deeds (and title insurance) for financed purchases to protect their security interest.
Types of warranty deeds
- General warranty deed
- Offers the broadest protection.
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The grantor warrants that they are the rightful owner, the title is free of liens or claims, and the buyer is protected against third-party title claims dating back to the property’s entire history—not just the grantor’s period of ownership.
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Special warranty deed
- Limits the grantor’s warranty to the period during which the grantor owned the property.
- The grantor does not guarantee against defects or claims that arose before they took ownership.
Steps to obtain a warranty deed
- Consult a real estate attorney or agent for guidance.
- Order a title search to identify liens, easements, or other encumbrances.
- Draft the deed with an accurate legal description and the appropriate warranty language.
- Sign the deed and obtain required witnesses or notarization per state law.
- Deliver the deed at closing and record it with the appropriate county recorder’s office to protect the buyer’s ownership rights.
Other common real estate deeds
- Quitclaim deed
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Transfers whatever interest the grantor has (if any) without warranties. Common in transfers between family members or to clear minor title issues.
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Deed in lieu of foreclosure
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The borrower transfers the property to the lender to avoid formal foreclosure when in default on a mortgage.
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Special purpose deed
- Used in court-ordered or fiduciary transfers; parties acting on behalf of an estate or entity convey property without personal liability.
Warranty deed vs. title insurance
- Warranty deed: A contractual promise from the seller that the title is clear (extent of protection depends on the deed type).
- Title insurance: An insurance policy that protects the buyer and lender against loss from covered title defects, including many issues not fully remedied by a warranty deed (e.g., clerical errors, undisclosed heirs, or prior fraud).
- Best practice: Combine a warranty deed, a thorough title search, and title insurance to maximize protection.
Examples of claims a warranty deed can protect against
- Outstanding liens or judgments incorrectly omitted during the sale
- Claims from creditors asserting the property as collateral for debts
- Fines or code violations tied to prior ownership if the warranty covers those periods
- Unpaid homeowners association (HOA) fees attributable to the seller’s period of ownership (depending on applicable warranties)
Risks and limitations
- Special warranty deeds leave buyers exposed to defects that originated before the seller’s ownership.
- A warranty deed only binds the grantor; if the grantor is insolvent or unavailable, recovery may be limited.
- Some title problems (hidden defects, forged documents, undisclosed heirs) may not be fully resolved by deed warranties alone—hence the role of title insurance.
Practical tips
- Always obtain and review a title search before closing.
- Consider purchasing owner’s title insurance in addition to relying on a warranty deed.
- Have deeds drafted or reviewed by a real estate attorney, especially in complex transactions.
- Record the deed promptly after closing to protect ownership rights and give public notice.
Conclusion
A warranty deed provides important legal assurances to buyers by assigning responsibility to the seller for covered title defects. Understanding the difference between general and special warranties, combining a deed with a title search and title insurance, and following proper recording procedures helps minimize risk and increase confidence in property transactions.