Warranty Deed: What It Is, How and When to Use
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A warranty deed is a legal document that transfers ownership of a piece of real estate from a seller (grantor) to a buyer (grantee). It guarantees the seller owns the property free and clear. Warranty deeds typically include a property description and important information, such as tax liens.
General warranty deeds are commonly used for residential real estate purchases and offer the most protection to the buyer.
Special warranty deeds only guarantee the most recent ownership of the property and are more often used in cases of temporary ownership, such as bank foreclosure .
When you buy or sell a home, you’ll most likely use a warranty deed. If you inherit property from a family member or separate property in a divorce, you might use a quitclaim deed instead.
Warranty deed pros and cons
Benefits | Drawbacks |
|---|---|
Guarantees that the owner has a legal right to sell the property. | Can be costly — from around $100 to several thousand dollars — depending on the transaction. |
Shows that the title has no outstanding debt claims or liens. | Buyer protection differs between general and special warranty deeds. |
Can be used to prove ownership to lenders. | Does not replace title insurance, which may be necessary with a special warranty deed. |
» MORE: See how a lady bird deed works
Types of warranty deeds
General warranty deed
A general warranty deed is the most common deed for residential property purchases. This type of deed guarantees that there are no creditors’ claims or tax liens on the property, and it promises that the seller will compensate the buyer if any claims emerge later .
General warranty deeds guarantee the buyer protection from any previous issues with the property, even fines from several owners ago.
Lenders often require this type of deed for proof of ownership to secure financing.
Special warranty deed
A special warranty deed — also called a limited warranty deed — is specific to the seller’s period of ownership of the property. It makes no promises about outstanding issues from previous owners .
This means that if a previous owner didn’t pay their homeowner association fees, for example, the new owner will be responsible for those fees.
This type of deed is more likely to be used in a special circumstance, such as if a bank takes temporary ownership of a property through foreclosure, or for commercial real estate.
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Warranty deed requirements
Warranty deeds vary by state, but they should typically include the following:
A legal description of the property.
The grantor (seller)’s name and address.
The grantee (buyer)’s name and address.
A statement that the grantor is the legal owner of the property and that the title is clear, with no outstanding liens or creditor claims.
A statement of intent to transfer from the grantor to the grantee.
With a special warranty deed, a statement that the grantor is only responsible for their own period of ownership.
Notarization by a notary public or other official.
» Learn more: Read how to use a transfer-on-death (TOD) deed
Warranty deed vs. quitclaim deed
The main difference between a warranty deed and a quitclaim deed is who uses them and how much protection they offer to both the buyer and seller.
Warranty deeds are commonly used in traditional real estate transactions — such as buying a home — to prove that the owner has a right to sell the property to the buyer. They have clauses that protect both parties from a contract breach, with variations depending on the type of warranty deed (special or general).
Quitclaim deeds transfer property “as is” between two trusted parties — such as adding a new spouse to a title — without any guarantee that the owner has a right to transfer the property or that there are no outstanding claims or liens. These deeds also don’t require title insurance as warranty deeds do.
» Learn more: How estate taxes work
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