Warranty Deed

What Is Warranty Deed?

A warranty deed gives you the strongest buyer protection. The seller warrants that they own the property, have the right to convey it, and that the title is free of encumbrances (except those disclosed). If a problem surfaces later—a lien from a prior owner, a boundary dispute, a forged deed in the chain—the seller is on the hook. General warranty deeds cover the entire history of the property. Special warranty deeds cover only the seller's period of ownership—common in REO and bank sales. Quitclaim deeds offer no warranty at all. For most purchases, insist on a general warranty deed. It's your insurance policy.

A warranty deed is a deed that includes the seller's promise (warranty) that the title is clear and that the seller will defend the buyer against any claims arising from the seller's period of ownership—and in the case of a general warranty deed, from all prior owners too.

At a Glance

What it is: A deed that includes the seller's promise of clear title
Types: General warranty (full history) vs. special warranty (seller's period only) vs. quitclaim (no warranty)
Why it matters: Protects you from past encumbrances and title defects
When used: Traditional sale = general warranty; REO = often special warranty; family transfer = quitclaim

How It Works

The six covenants of title. A general warranty deed typically includes six promises from the seller to the buyer:

Covenant of seisin: The seller owns the property and has the right to convey it.
Covenant of right to convey: The seller has legal authority to transfer title.
Covenant against encumbrances: The title is free of encumbrances except those disclosed (e.g., the mortgage, easements in the title report).
Covenant of quiet enjoyment: The buyer won't be disturbed by someone with a superior claim.
Covenant of warranty: The seller will defend the buyer against any claim that arises from a defect in the seller's title.
Covenant of further assurance: The seller will do whatever is needed to fix any title defect.

General vs. special warranty. A general warranty deed covers the entire chain of title—every prior owner. If a lien from 1995 surfaces, the seller (or their estate) is liable. A special warranty deed (also called a "limited warranty deed") covers only the seller's period of ownership. "I warrant that during my ownership I didn't create any encumbrances." Banks and REO sellers use special warranty deeds because they don't want to be on the hook for problems that predate their ownership. As a buyer, you lose protection for pre-seller defects.

Quitclaim deeds. A quitclaim deed transfers whatever interest the seller has—with no warranty. Used in divorces, family transfers, and clearing clouds. Never accept a quitclaim when paying full market value—you're buying blind.

When each type is used. Traditional sale: general warranty. REO, short sale, estate sale: often special warranty. Family gift, divorce: quitclaim. Deed of trust states: the trustee conveys with a special warranty when the loan is paid off.

Real-World Example

Ava in Austin. Ava was under contract on an REO 3-bedroom in East Austin for $312,000. The bank's title company sent the closing documents: a special warranty deed. The bank warranted only that during its ownership (since the foreclosure 14 months earlier), it hadn't created any encumbrances. Ava's agent pushed back. The title report was clean, but REO properties can have surprises—unrecorded liens, HOA claims, boundary issues from the prior owner. Ava insisted on a general warranty deed or a $5,000 price reduction to compensate for the weaker protection. The bank refused the general warranty (policy) but agreed to a $3,200 credit. Ava closed with the special warranty and used the credit to buy an owner's title insurance policy with enhanced coverage. She'd negotiated for protection when she couldn't get the stronger deed.

Pros & Cons

Advantages

General warranty deed gives the strongest buyer protection—seller stands behind the entire chain of title
Creates legal recourse if a title defect surfaces after closing
Standard in traditional sales—escrow and title companies expect it
Complements title insurance—you have both the insurer and the seller as backstops

Drawbacks

Sellers (especially banks and estates) often resist general warranty—they don't want unknown liability
Special warranty is common in distressed sales—you get less protection
Warranty deeds don't prevent problems—they just give you someone to sue if one appears
Quitclaim deeds offer no protection—never use them when paying full value

Watch Out

Compliance risk: Read the deed before closing. Some special warranty deeds are drafted to exclude specific encumbrances or time periods. Know what you're getting.
Modeling risk: Don't assume you'll get a general warranty on REO or short sales. Budget for title insurance enhancements if you accept a special warranty.
Execution risk: The deed is signed at closing—review it in advance. Once you close, you've accepted the deed type. Negotiate early.
Exit risk: When you sell, you'll typically give a general warranty deed to your buyer. That means you're warranting your entire period of ownership—including any encumbrances you may have created. Keep clean records.

Ask an Investor

The Takeaway

A warranty deed is your protection against title defects. General warranty = full protection for the entire chain of title. Special warranty = protection only for the seller's period. Quitclaim = no protection. For most purchases, insist on a general warranty deed. When sellers (especially banks) push back with a special warranty, negotiate a price reduction or enhanced title insurance. Never accept a quitclaim when you're paying market value.