Casey Bond is a seasoned personal finance writer and editor. In addition to Forbes, her work has appeared on HuffPost, Business Insider, Yahoo! Finance, MSN, The Motley Fool, U.S. News & World Report, TheStreet and more. Casey is also a Certified.
Casey Bond ContributorCasey Bond is a seasoned personal finance writer and editor. In addition to Forbes, her work has appeared on HuffPost, Business Insider, Yahoo! Finance, MSN, The Motley Fool, U.S. News & World Report, TheStreet and more. Casey is also a Certified.
Written By Casey Bond ContributorCasey Bond is a seasoned personal finance writer and editor. In addition to Forbes, her work has appeared on HuffPost, Business Insider, Yahoo! Finance, MSN, The Motley Fool, U.S. News & World Report, TheStreet and more. Casey is also a Certified.
Casey Bond ContributorCasey Bond is a seasoned personal finance writer and editor. In addition to Forbes, her work has appeared on HuffPost, Business Insider, Yahoo! Finance, MSN, The Motley Fool, U.S. News & World Report, TheStreet and more. Casey is also a Certified.
Contributor Rachel Witkowski Correspondent/EditorRachel Witkowski is an award-winning journalist whose 20-year career spans a wide range of topics in finance, government regulation and congressional reporting. Ms. Witkowski has spent the last decade in Washington, D.C., reporting for publications i.
Rachel Witkowski Correspondent/EditorRachel Witkowski is an award-winning journalist whose 20-year career spans a wide range of topics in finance, government regulation and congressional reporting. Ms. Witkowski has spent the last decade in Washington, D.C., reporting for publications i.
Rachel Witkowski Correspondent/EditorRachel Witkowski is an award-winning journalist whose 20-year career spans a wide range of topics in finance, government regulation and congressional reporting. Ms. Witkowski has spent the last decade in Washington, D.C., reporting for publications i.
Rachel Witkowski Correspondent/EditorRachel Witkowski is an award-winning journalist whose 20-year career spans a wide range of topics in finance, government regulation and congressional reporting. Ms. Witkowski has spent the last decade in Washington, D.C., reporting for publications i.
Updated: May 24, 2023, 1:21pm
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There’s a lot at stake when buying a home. After all, it’s likely the biggest purchase you’ll make in your lifetime. The last thing you want is to close on your dream home only to have a bank come knocking on the door later questioning who has the legal right to the property. That’s where a warranty deed comes in.
In a real estate transaction, there is a grantor and a grantee. These can be individuals or businesses. A warranty deed is a real estate document that warrants—or promises—that the grantor (seller) owns the property free and clear and there aren’t any outstanding mortgages, liens, judgments or other encumbrances against it. In other words, the seller has the authority to transfer the ownership rights to the grantee (buyer).
A warranty deed isn’t proof that you now own the property. Rather, it means the previous owner can guarantee that no one else holds ownership or is owed money for the property. You don’t actually own the property until the title is transferred to you.
The warranty deed will contain details such as the property’s address, parcel number, a legal description of the property, the transaction date and the names and addresses of the parties involved. In order to be legally binding, the warranty deed needs to be notarized and filed with the city or county office for keeping real estate records. It’s delivered to the grantee at the real estate closing.
There are actually two types of warranty deeds. Here’s a closer look at how each works.
A general warranty deed offers the highest level of protection to the buyer. If there is a breach of the general warranty deed, the seller is responsible—even if it happened without them knowing or at a time when they didn’t own the property.
According to Legal Zoom, a general warranty deed guarantees that:
A special warranty deed works similarly to a general warranty deed, except that it only applies to a certain timeframe. Basically, the special warranty deed promises that the current seller has the title to the property and there were no claims against it while they owned it.
The special warranty deed doesn’t protect against claims prior to when the seller received the title. These types of warranty deeds are most common with commercial real estate transactions.
This is why title insurance is important for protecting against potential liens and other claims. The title company will do the research ahead of the final sale to be sure there aren’t any possible breaches before the property gets transferred to the buyer, whether they’re using a general or special warranty deed.
A statutory warranty deed is a legal document that transfers ownership of the property from the seller (the grantor) to the buyer (the grantee). It implies a guarantee that the grantor holds full and clear title to the property and will compensate the buyer should any claims emerge against the home’s title in the future.
A statutory warranty deed differs slightly from a general warranty deed because it’s a shorter form available through a state’s statutes and it doesn’t explicitly make the promise that the title history is clear. Instead, because it’s a statutory form, this guarantee is implied and is still legally enforceable.
In some cases, a landowner might use a grant deed in place of a warranty deed. The grant deed provides essentially all the same protections: No one else has a claim to the land, and there aren’t any liens or restrictions. However, the one thing a grant deed doesn’t protect against is third-party claims.
The cost of a warranty deed will vary depending on the state in which the property is located and the type of property being purchased. In general, costs can range anywhere from a few hundred dollars to a few thousand dollars.
A warranty deed generally includes the following information:
A buyer typically needs a warranty deed when they attempt to get a mortgage or title insurance. Keep in mind, however, that not all real estate transfers involve an actual purchase, such as transferring a home from one family member to another.
It’s a good idea to get a warranty deed if:
If you are the buyer, you can require a warranty deed in order for the transaction to take place. A real estate lawyer can help with this.
As a seller, you can find many warranty deed templates online or through a local Realtor’s office. Just remember that it needs to be signed by both parties, notarized and filed with the county clerk’s office to be official. Usually, the lender will send off all the mortgage documents to be recorded, and the recording fees are rolled into the loan closing costs. The grantee will receive the original document once it’s recorded, and the grantor will get a copy for their records.
Though a quitclaim deed is similar to a warranty deed, it is not interchangeable. A quitclaim deed only states that the grantor is giving up their legal interest in a property. It doesn’t promise that other individuals or entities also have an interest in it.
There isn’t much protection for the grantee with a quitclaim deed, so it’s usually used in situations where both parties already have established trust, such as transferring property between family members.
Another document that you might confuse with the warranty deed is the deed of trust.
If you take out a loan to finance a home purchase, you will sign either a mortgage contract or a deed of trust (but not both). The deed of trust secures the real estate transaction and designates a third party (trustee) to handle the foreclosure process if you don’t pay back your loan. Essentially, it states that the trustee holds legal title to your property until you’ve paid it off according to the terms of your loan.
Forbes Advisor Editor in Chief Mike Cetera contributed to this article.
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