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The Difference Between A Special Warranty Deed And A General Warranty Deed

Special Warranty Deed And A General Warranty Deed

Are you in the process of selling or buying a residential real property? If yes, you should have heard of the general or special warranty deed. It is the best platform to help you understand what a special warranty deed is. 

It is commonly used in the transfer of homes to the new homeowner and there is a broad range of warranties to protect the buyer. This article will be looking at a general warranty deed vs. a special warranty deed. You will discover that the level of protection that each of them offers to the buyer is different. 

What Are Property Deeds? 

Property Deeds

Property deeds are legal documents that are used to transfer the interest of ownership in the real estate industry from one individual (grantor) to the other (grantee). Therefore, a deed has to identify the grantee and grantor and also provide a legal description of the real estate property

The warranty deed is the most common type of deed that is used to transfer a residential property within the country. There are basically two types of warranty deeds which include the general and the special one. Hope you get to know the warranty deed definition and its basics. 

The Basics Of Warranty Deeds

Basics Of Warranty Deeds

A warranty is a kind of guarantee or type of promise. It is significant to know warranty deed definition and its basics. For instance, if you purchase an iron box that has a warranty of one year, the manufacturer is guaranteeing you that the appliance will work perfectly for the whole year. If it does not meet this standard, he promises to replace or fix it at no extra cost. 

This is the type of guarantee that the warranty deed offers for anyone who is buying a real estate property. When the grantor transfers the property interest to the grantee through a warranty deed, there are so many guarantees that the grantor makes to the guarantee. 

He guarantees that he owns the interest of the property that is being transferred to you. Therefore, the individual is legally authorized to sell the property and it hasn’t been sold to another person. 

He also warrants that if there are any encumbrances like liens, easements, or mortgages to the property, he has disclosed all of them to the grantor. The grantor also promises to defend the grantees in case a third party raises a claim against the property. 

If the buyer would like to get a mortgage in order to buy the property, most lenders need a warranty deed as a condition to lend. A title company has to research the history of the property title and ensure that no issues exist before the issuance of a warranty deed. If a title company issues title insurance, it will have to pay for any legal action that the grantor needs to undertake under the deed warranties that she made. 

General Warranty Deed Vs. Special Warranty Deed

General Warranty Deed Vs. Special Warranty Deed

Both the geeneral warranty deed and special warranty deed offer the grantee a title guarantee. However, the scope of the guarantees that the general warranty offers is broader. These guarantees cover the entire history of the property

If a grantor signs a general warranty deed, it guarantees him against any undisclosed liens and encumbrances. Also title claims regardless of the period in which they took place. She is required to defend the property title legally against any form of claim and pay the grantee for all unsettled claims against that particular property. 

On the contrary, special warranty deeds Texas normally make guarantees whose scope is narrower. Typically, they only cover the period under which the property was owned by the grantor. If a grantor has a special warranty deed, she is only responsible to defend the grantor from any property encumbrances or title issues that arose while she was the property owner. 

Any problems or defects that took place before the grantor purchased the property are exempted. The warranties that are in a special warranty deed are created by the state law which means they can vary from one state to another. It is advisable to confirm with the real estate experts or a legal professional before signing the document. 

1. General Warranty Deed 

Most transactions require general warranty deeds as it gives the buyer the assurance that he is getting a proper and good title for the property. To get this, the buyer has to obtain a full title insurance and title search. 

It gives a complete ownership chain as it also covers the title of the prior owners. It also shows that the property is free from any restrictions like liens and encumbrances unless the grantor has listed them. Therefore, in case there are any claims against the property, the seller has to defend the buyer. 

2. Special Warranty Deed 

Do you know what is a special warranty deed? The warranties that the special warranty deed makes are similar to those of the general warranty deed. However, it only covers the problems that arose when the seller was in possession of the property. Therefore, it does not cover the problems that took place with the prior owners of the property. 

Therefore, if a third party alleges a defect in the title before the seller was in possession of the property, he has no obligation to protect the buyer. The seller will only protect you against those defects took place when he was the legal owner of the property. 

3. Quit Claim Deed 

Quitclaim deeds give property buyers the lowest level of protection. It is also the cleanest and easiest way of transferring a property title. In this case, the seller does not make any warranty whether she has a proper property title or not. 

In most cases, family members are the ones who use the quitclaim deeds to transfer property. It is good to look at this element as you analyze the whole topic of general warranty deed vs. special warranty deed. 

Conclusion 

Several instances call for the use of a special warranty deed, general warranty deed, or even a quitclaim deed. If you are sure about the history of the property, you can always go for the special warranty deed.

If not, it is good to choose the general warranty deed as it covers a longer period even though it is the most expensive. The quitclaim deed only applies to those individuals who trust themselves fully. 

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Sofia
Sofia Kelly is a passionate blogger. She loves to share her thoughts, ideas and experiences with the world through blogging.

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