Law Commentary
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What is a Warranty Deed for Real Estate?

A warranty deed is a legal document that is used to transfer ownership of real estate from one person to another. It is considered one of the most secure forms of real estate conveyance because it offers specific guarantees to the new owner, known as "warranties." Understanding what a warranty deed is and how it works can be important for anyone buying or selling real estate.

A warranty deed is a written document that contains specific promises or guarantees made by the seller (the grantor) to the buyer (the grantee). The key feature of a warranty deed is that it guarantees the buyer that the property being sold is free and clear of any encumbrances, such as mortgages, liens, or other debts. This means that if any issues arise with the property's title, the seller is liable to the buyer for any damages.

Warranty deeds are divided into different types based on the level of protection offered. A General Warranty Deed offers the most comprehensive protection, as it includes several types of warranties, including:

  • A warranty of title: The seller guarantees that they have a clear and marketable title to the property and that they have the right to sell it.

  • A warranty of quiet enjoyment: The seller guarantees that the property will not be disturbed by any adverse claims or liens.

  • A warranty of possession: The seller guarantees that the property is vacant and that the buyer will have peaceful possession of the property after closing.

  • A warranty of further assurances: The seller guarantees that they will take any action that may be necessary to clear up any title defects that may arise after the sale.

Special Warranty Deeds, on the other hand, only offer specific protection to the buyer, such as covering only title issues that arose during the seller's ownership, which means the seller will not be liable for any issues that existed before they owned the property.

A warranty deed is generally considered a more secure form of real estate conveyance than a quitclaim deed, which is a simpler document that only transfers the seller's interest in the property without making any guarantees or warranties. A quitclaim deed is not commonly used in real estate transactions because it does not provide any protection to the buyer regarding the property's title.

Warranty deeds are often used in real estate transactions, especially when a buyer is obtaining financing for the purchase. Lenders often require that a warranty deed be used in order to ensure that the property's title is clear and marketable, which makes it a more attractive collateral for a loan.

It's important to note that in most cases, a warranty deed is not a guarantee that the property is free of physical defects or other issues. A separate home inspection is typically needed to identify any potential issues with the property. Additionally, a survey of the property is usually required to ensure that the property's boundaries are correctly depicted and any potential disputes are resolved.

In conclusion, a warranty deed is a legal document used in real estate transactions that guarantees the buyer that the property being sold is free and clear of any encumbrances such as mortgages, liens, or other debts. It provides a higher level of protection than a quitclaim deed, but doesn't guarantee the property is free of physical defects or other issues. It is important for buyers to conduct a home inspection and a survey of the property, in order to identify any potential issues before closing the transaction. As always, it's important to consult a lawyer, a real estate agent and a tax professional to understand how this applies to your specific case.

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