What is a Warranty Deed form, you ask? Well, first of all, a deed is a type of legal document that transfers real property from a person, place or thing to another. Whether you buy a piece of property, inherit property or add a person’s name to the title of the property, you will always need a deed.
More specifically, a Warranty Deed offers protection to the buyer because the seller affirms that he or she legally owns the piece of property and that there are no encumbrances against the property.
A Warranty Deed form is also a guarantee of title and offers the buyer protection in the form of holding the seller liable for any damages if the title is not free and clear of any claims.
There are two types of Warranty Deeds:
A General Warranty Deed is a deed promising that the grantor, or seller, has a good title free and clear of all liens and encumbrances and will defend the grantee, or buyer, against all claims that may arise. If you are the buyer, you will want a General Warranty Deed because it offers the buyer the most protection.
A Special Warranty Deed provides that the seller has not done anything to cause problems with the title to the property during the period of his or her ownership. Special Warranty Deeds are a guarantee from the seller stating that nothing has happened to cause problems with the title while the seller has owned the property. If you are selling a piece of property, a Special Warranty Deed offers more protection to the seller. A Special Warranty Deed should be used when selling a piece of property if you know that no one will make a claim through your title, but you may be unsure if there are prior claims against the property.
A Warranty Deed provides a way for a seller to transfer ownership or title of real estate to the buyer and warrant, or guarantee, that the seller legally owns the property. A buyer does not want to discover that the property has liens or encumbrances after the transaction is complete. By using a General Warranty Deed, the buyer can seek recourse against the seller after the transaction is completed.
Similarities between a General Warranty Deed and a Special Warranty Deed
Both General Warranty Deeds and Special Warranty Deeds offer the same guarantees to the buyer and are similar in that:
- The seller owns the title.
- The seller can sell the property legally.
- The property has not been sold by the seller.
- The property is free and clear of all claims.
- The seller is responsible for any problems with the property.
A General Warranty Deed covers claims over the entire history of the property. A Special Warranty Deed only covers the time that the seller owned the property.
Differences between a General Warranty Deed and a Special Warranty Deed
There are distinct differences between a General Warranty Deed and a Special Warranty Deed and one or the other should be preferred whether you are the buyer or the seller. The differences between a General Warranty Deed and a Special Warranty Deed include:
- A buyer should request a General Warranty Deed because it offers the buyer the utmost protection. A General Warranty Deed assures clear title all the way back to the origin of the property.
- A buyer must purchase title insurance when extended a Special Warranty Deed to assure that that the title of the property is clear.
- A seller using a General Warranty Deed is required to defend the title against all claims and compensate the buyer for any encumbrances.
- The seller in a Special Warranty Deed is only responsible for problems that occurred during his ownership of the property.
Title Insurance and Warranty Deeds
Due to problems arising during the transaction of real estate, warranty deeds are often accompanied with a title search and the purchase of title insurance.
A title search is performed by a title company. Title companies examine public documents that record real property, find the location and establish legal ownership, and check for any outstanding encumbrances or liens that would prevent the buyer from obtaining a clear title.
It is prudent for a buyer to purchase title insurance to assure a clear title, especially when the seller uses a Special Warranty Deed. Lenders will require title insurance and it is available for owners, buyers, and lenders. With title insurance, the buyer can rest assured that the warranty deed form has clear title, while lenders are assured that there are no encumbrances on the property.
Do I Need a Lawyer to Create a Warranty Deed Form?
No, you don’t need to hire a lawyer to create your own warranty deed. Just download and print a warranty deed form online and complete the document yourself.
However, if you have specific issues that you do not know how to address, a generic warranty deed form will not be for you. If you do not know what you are doing and need help, we highly suggest that you consult a licensed attorney before you draft and execute a DIY warranty deed form.