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A warranty deed is used when a seller sells the property to a buyer to verify that the title to the property being transferred is valid and free of defects.

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What is a Warranty Deed?

A warranty deed, sometimes known as a general warranty deed, is a legal instrument used in real estate transactions. 

The warranty deed is the most protective of all the numerous forms of property deeds, which also include special warranty deeds and quitclaim deeds.

How Does a Warranty Deed Work?

A deed is a significant legal document that transfers property from one person to another, most typically in the event of a real estate transaction. 

A general warranty deed provides the buyer with the maximum level of security.

Warranty deeds are also used when a borrower applies for a mortgage or title insurance financing. The date of the sale, the names of the parties involved, a description of the property traded, and the buyer’s signatures are all included in all deeds.

A general warranty deed holds the grantor liable for a breach of specified guarantees and assurances, even if the breach occurred without his or her knowledge or during a period when the grantor did not possess the land.

The grantor bears a lot of responsibility under the broad warranty deed since he or she is liable for any breaches that occurred much outside their comprehension of property ownership.

What is a Special Warranty Deed?

A special warranty deed is not as extensive as a general warranty deed since it only offers two warranties:

  • The grantee certifies that he or she has been given the title.
  • The grantor certifies that the land was not encumbered during the grantor’s ownership.

A special warranty deed does not provide legal protection until the grantee obtains title. Special guarantee deeds are commonly utilized in commercial real estate.

What Is Covered by a Warranty Deed?

Each state has its standards for what should be included in a warranty deed. However, there is certainly essential information that should be included in each warranty deed

This data set includes:

  • The identities and addresses of both the grantor (seller) and grantee (buyer).
  • A thorough description of the land, including property lines, roads, sewage lines, and any other distinguishing features.
  • The warranty deed indicates that the seller is granting the buyer the property.
  • Proof of consideration, such as the price paid for the property or words are indicating that the property was transferred to the grantee.
  • Both the grantor’s and the grantee’s signatures are required.

In most circumstances, a notary public acknowledgment is required. A warranty deed, in particular, should include wording ensuring that the title to the property is unambiguous.

Does a Warranty Deed Establish Ownership?

A warranty deed does not show ownership of a property on its own; documentation of title to the property is also required. If there is a mistake in a deed, another person may have a claim to the same property.

A warranty deed guarantees a buyer that they will possess the property free and clear and that the seller will be held accountable if there is a title issue. 

Buyer should always do their homework and do a title search to ensure there are no flaws.

If a buyer is unclear on how to do a title search, speaking with a property law professional may be beneficial. 

Even though a warranty deed offers the most protection of any property deed, it is nevertheless suggested that a buyer acquire title insurance as well.

Title insurance will safeguard a buyer from any damages incurred during the ownership of the property due to title flaws.