Real Estate

Published: Sep 19, 2022 | Updated at: Sep 19, 2022

Is buying a home a goal of yours this year? Then it's important to know the difference between a warranty deed and a special warranty deed.

A warranty deed certifies that the property's title is free and clear, while a special warranty deed only certifies that the vendor is not responsible for any claims made after the sale is complete. Knowing which type of deed to use can help avoid potential problems down the road. Read on for more info.

What Is a Property Deed?

A deed is a legal document that conveys the ownership of property from the legal owner to someone else. When you purchase a home, you will sign a deed that transfers the property from the vendor to you. There are different types of deeds, each with its own benefits and drawbacks.

What Is a Warranty?

A warranty is a type of guarantee. When you purchase a product with a warranty, the manufacturer or vendor guarantees that it will meet certain standards or perform in a certain way. If the product does not meet those standards or fails to perform as promised, the manufacturer or vendor will typically repair or replace it at no cost to you.

What Is a Warranty Deed?

In the context of real estate, a warranty deed is a type of deed in which the vendor promises that they have good title to the property and that there are no ongoing liens or claims against it. If there are any problems with the property after the sale, the vendor agrees to address them. As a result, warranty deeds offer more protection to buyers than other types of deeds.

Types Of Warranty Deeds

There are two types of warranty deeds: general and special warranty deeds. A general warranty guarantees that the title is free of any liens or ownership claims and that the vendor will defend the buyer against any that arise after the sale. A special warranty only guarantees that the title is clear at the time of sale and that the vendor is not responsible for any claims that arise after the sale.

When you purchase a home, you will sign a deed that transfers the property from the vendor to you. If there are any claims or liens against the property after the sale, you will be responsible for addressing them.

As a result, warranty deeds are generally only used in situations where the buyer knows and trusts the vendor. When signing a deed, it is important to make sure that you understand what type of deed it is and what protections it offers. Otherwise, you could find yourself responsible for addressing problems with the property that you were not expecting.

A warranty deed is more often used in residential property sales. Use a warranty deed when:

  • The property is being transferred to a family member or close friend
  • You are confident that there are no claims or liens against the property
  • You want to save on the cost of title insurance and/or a lawyer

What Is A Special Warranty Deed?

This type of deed only guarantees that the vendor has good title to the property at the time of sale. If there are any claims or liens against the property after the sale, you will be responsible for addressing them. As a result, these deeds offer less protection to buyers than warranty deeds.

However, they are often used in situations where the buyer does not know or trust the vendor. When signing a deed, it is important to make sure that you understand what type of deed it is and what protections it offers. Otherwise, you could find yourself responsible for addressing problems with the property that you were not expecting.

This deed is most often used in commercial property sales. This should be used when:

  • You are buying a property from a stranger
  • You are not sure if there are any claims or liens against the property
  • You want to protect yourself from potential problems with the property

A Special Warranty Deed VS Warranty Deed

The key difference is the level of protection they offer to buyers. A warranty deed guarantees that the vendor has good title to the property and that there are no ongoing liens or claims against it. If there are any problems with the property after the sale, the vendor agrees to address them.

As a result, warranty deeds offer more protection to buyers than other types of deeds. A special warranty deed only guarantees that the vendor has good title to the property at the time of sale. If there are any claims or liens against the property after the sale, you will be responsible for addressing them. As a result, special warranty deeds offer less protection to buyers than warranty deeds.

Which One Should You Use?

When deciding which type of deed to use, you should consider the benefits and drawbacks of each. A warranty deed offers more protection than a special warranty deed, but it may not be necessary if you know and trust the vendor.

The special warranty deed is less protective, but it may be a better option if you are buying from a stranger. Ultimately, deciding which type of deed to use should be based on your specific situation and the level of protection you feel comfortable with.

What Must Be Included in These Deeds?

There are a few things that you must have on a special warranty deed for it to truly protect you. It must include:

  • The name of the vendor
  • A description of the property being sold
  • The date of the sale
  • The signature of the vendor

For a warranty deed, include all of the above as well as a statement that the vendor has good title to the property and that there are no ongoing liens or claims against it.

How to Protect Yourself From a Special Warranty Deed

If you are buying a property with this type of deed, there are a few things you can do to protect yourself.

The first thing you want to do is order a title search. This will help you identify any claims or liens against the property that the vendor may not be aware of.

Then, get insurance. In the event of any title-related difficulties that were not discovered during the title search, title insurance will safeguard you.

Finally, hire a lawyer. A real estate lawyer can help you understand the deed and protect your interests in the event of any problems.

Title Search

A title search is an investigation of the public records to determine who owns a piece of property and whether there are any claims or liens against it. This information is important to know before buying a property, as it can help you identify potential problems that may not be apparent at first glance.

To order a title search, you will need the following information:

  • The address of the property
  • The name of the current owner
  • The date of the sale (if applicable)

After you receive this information, contact a lawyer or the title company to request a title search. The cost of a title search varies depending on the complexity of the property and the jurisdiction in which it is located, but it is typically between $100 and $500.

Title Insurance

Title insurance protects you against property title-related losses. If you discover that there are claims or liens against your property after you have purchased it, title insurance will pay for the legal costs of resolving these issues.

Title insurance is not required in all states, but it is generally recommended when buying a property with this type of deed. The cost of a title insurance policy depends on the level of risk and its value.

Real Estate Lawyer

A real estate lawyer can help you understand and protect your interests if there are any problems with the property. They can also help you negotiate with the vendor if there are any ongoing claims or liens against the property.

The cost of hiring a lawyer varies depending on their experience and the jurisdiction in which the property is located.

Understanding Your Deed Needs

It is important to understand the difference between both deeds before signing either. Otherwise, you could find yourself responsible for addressing problems with the property that you were not expecting.

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