What is a warranty deed?

A warranty deed is a key document you’ll receive when buying a home. It’s your assurance that the seller has the legal right to transfer the property and that the title is free from claims and liens. It typically includes a description of the property, including any encumbrances, and ensures a clean transfer from the seller to the buyer.

Because a warranty deed is such an important document, let’s explore everything you need to know about it, including how to get one and the various types of deeds you may encounter when buying a home.

What is a warranty deed on a house?

A warranty deed may be an unfamiliar mortgage term. It’s a legal document used when a property is sold. It’s the most common type of deed and usually describes the property being transferred and discloses all known encumbrances, including easements, outstanding liens, and judgments. The document is intended to legally assure the buyer, or grantee in legal terms, that the seller, or grantor, has the legal right to sell the property and that the property is free of title problems or other claims.

5 common types of deeds

While a warranty deed is the most common type of deed, there are other types of deeds, each of which is used in specific situations.

1. General warranty deed

A general warranty deed is the gold standard of property transfers. That's because it offers buyers the greatest possible protection from future claims against the title. This type of deed is overwhelmingly used in residential purchases, and most lenders require a warranty deed for properties they finance.

Imagine a previous owner of a property you bought was fined for code violations or failed to pay homeowners association (HOA) fees. With a warranty deed, you won't be responsible for paying these liabilities.

2. Special warranty deed

A special warranty deed is a less beneficial transfer of ownership. It guarantees there has been no encumbrance of the property during the grantor's ownership of the property. But it doesn't cover anything that happened before their ownership. In this case, the seller only guarantees that no defects arose during their ownership.

3. Quitclaim deed

A quitclaim deed is used for transactions in which property ownership is not an issue. That includes scenarios such as divorce, inheritance, or the transfer of ownership of a business or trust. One owner uses a quitclaim deed to renounce their claim to the property. In a divorce situation, the spouse who leaves the marital home with no future financial involvement must sign a quitclaim deed to avoid future liability.

The quitclaim does not actually create any warranties or guarantees. It doesn't even constitute proof that the grantor ever had a valid claim to the property. It merely transfers whatever interest the grantor might have.

4. Deed in lieu

If a borrower defaults on their mortgage, they may transfer the property to the lender through a deed-in-lieu of foreclosure. This avoids having a foreclosure on their credit history. A deed-in-lieu is valuable to lenders because foreclosures take a long time, and legal fees make them very expensive.

Though you avoid going through a foreclosure if you are granted this option, the consequences are still very serious. Borrowers who are facing difficulty paying their mortgage should reach out to their mortgage servicer to discuss possible options.

5. Special purpose deed

Special-purpose deeds are legal instruments that can be used to transfer property ownership in specific, sometimes court-ordered, circumstances. They usually offer limited or no warranties on the title. A deed in lieu of foreclosure is a special-purpose deed that is commonly used in residential real estate transactions.

Other types of special-purpose deeds include an executor’s deed, which can be used by an executor to sell a deceased person’s property when they’re authorized to do so by a will. A tax deed that’s issued by a government agency when a property is sold to satisfy unpaid property taxes is also a kind of special-purpose deed.

How do I get a warranty deed?

If you're selling your home, you can get a warranty deed from your real estate agent, attorney, or title company.

As you’re closing on a property, the attorney for the seller or the title company will usually draft the warranty deed. Later it’s recorded with the county recorder’s office where the property is located once it is notarized and signed by the seller.

The warranty deed should include the names of the seller and buyer, signatures from each party, and a description of the property. Here are the general steps you’ll go through to get a warranty deed.

1. Seller’s attorney or title company drafts a warranty deed.
2. You and your agent receive and okay it.
3. You and the seller sign it and get it notarized.
4. The deed is recorded with the county recorder’s office.

FAQ

Here are some answers to common questions about warranty deeds.

How does a general warranty deed protect grantees?

The guarantees and disclosures in a general warranty deed mean the new owner can hold the former owner responsible for any title defect. If a third party files a claim against your title, you could sue the former owners. If your claim is successful, the grantors must cover any liability you incurred along with your costs.

Even if you get a general warranty deed from the seller, you may still need title insurance to fully protect your interests and cover a broader range of potential ownership claims. Your real estate agent or attorney can offer the best advice.

Do I need a title search and a general warranty deed?

Yes, in addition to receiving a warranty deed, your lender will probably require you to get a title search to ensure there are no issues or errors. It's common to verify that the general warranty deed is accurate by also conducting a title search. Remember, the house is the security for the mortgage loan. If the house is lost or substantially devalued, the collateral is compromised.

The bottom line: A general warranty deed offers important benefits

A general warranty deed protects you from title claims and is a critical safeguard when buying a home. It gives the grantor the legal right to sell the home and confirms the property has no title conflicts. When you get a general warranty deed, you know your ownership rights are protected and that the title history of the property has been verified.

If you’re ready to buy a home, you can explore borrowing options by starting an application today with Rocket Mortgage.