What is a Warranty Deed?

What is a warranty deed?

Many new real estate shoppers and investors hear loads of confusing jargon when they get started, and one term in particular has them scratching their heads more often then others, causing them to ask: “What is a warranty deed?”

The definition of warranty deed is a legal document that the seller (grantor) uses to guarantee that he or she holds a clear title to a piece of real estate and has a right to sell it to the buyer.

For instance, if you want to buy a house, (making you the buyer) then the best document for YOU to get on it would be the warranty deed. If you purchase a property with a Warranty deed on it, then you know that you will not have to pay for any little surprises that pop up after the sale, like city or mechanics liens that were tied to the property.

The Warranty deed is a safeguard for the BUYER. –But in the recent economy, it has become by far the most common deed to be used in property transactions.  

It is important to note that the deed’s guarantee is not just limited to the time the grantor owned the property, it extends all the way back to the origin of the property. So if a weed lien got misfiled for 80 years somehow and the county found it while updating their computer system, you as the new owner would not have to pay for it, because the previous owner guaranteed you a clear title.

Like all deeds, a warranty deed first and foremost establishes ownership and declares that the owner of the property has the right to sell it to you.

In the case of the previous owner’s death, or inability to follow through on the warranty if title problems arise, then different states handle warranty deeds differently. In some the next of kin is sought to pay for the damages, and in most others, you, as the buyer, will simply be responsible for clear title when its comes time for you to sell it to the next owner.

Keep in mind that regardless of the type of Deed offered, a smart buyer will still perform a title search on any property, if for no other reason than the fact that the previous owner might not know about a lien. If you find any debts against the property, the seller has until closing to pay it off.

When you need a blank copy of a warranty deed, simply go down to your county courthouse and find the office that holds the property records. There is more than likely going to be a small paperwork fee, but that’s just part of the cost of buying and selling real estate.