What Is a Warranty Deed?
A warranty deed is the strongest form of deed for a buyer. It includes a promise from the seller (grantor) that they own the property free and clear, and that there are no hidden claims or liens against it. This promise is called a warranty.
There are two main types: general warranty deeds and special warranty deeds. A general warranty deed covers the entire history of the property, meaning the seller guarantees no issues existed before they owned it. A special warranty deed only covers the time the seller owned the property, not earlier periods.
If a title problem arises later, the buyer can sue the seller for breach of warranty. This gives you legal recourse to recover financial losses, which is a significant advantage.
- Includes guarantees about clear title and no undisclosed liens.
- Provides legal recourse if title defects surface after the sale.
- General warranty covers the full history; special warranty covers only the seller's period of ownership.
- Typically used in traditional home purchases with a mortgage.
What Is a Quitclaim Deed?
A quitclaim deed transfers whatever interest the seller has in the property, without any promises or warranties. The seller simply gives up any claim they might have, but they do not guarantee that the title is clear.
This type of deed is often used between family members, in divorces, or to clear up a title defect. It is not recommended for standard sales to unrelated buyers because it offers no protection against title problems.
With a quitclaim, if a hidden lien or another owner's claim appears, the buyer has no legal ground to sue the seller. The buyer assumes all risk.
- Transfers only the interest the seller actually has, if any.
- No warranties about title or liens.
- Common for adding a spouse to a title or transferring property between relatives.
- Does not protect the buyer against title defects or claims.
Key Differences at a Glance
The core difference is the level of protection. A warranty deed provides guarantees and legal recourse; a quitclaim provides none. This affects your rights and your ability to resolve title issues after closing.
Another difference is the typical use. Warranty deeds are standard in real estate sales financed by lenders. Quitclaims are for non-sale transfers where the parties know each other and accept the risk.
Cost and complexity also vary. Warranty deeds often require a title search and title insurance to back the warranties. Quitclaims are simpler and less expensive, but they shift risk to the buyer.
- Protection: warranty deeds offer guarantees; quitclaims do not.
- Recourse: warranty deeds allow lawsuits for title defects; quitclaims do not.
- Typical use: warranty for sales, quitclaim for gifts or transfers without money.
- Title search: often required for warranty deeds, but not for quitclaims.
- Risk: warranty deeds place risk on the seller; quitclaims place risk on the buyer.
Which Deed Should You Use?
If you are buying a home from a stranger or through a real estate agent, insist on a warranty deed. Lenders usually require it. It protects your investment and gives you peace of mind.
A quitclaim is acceptable when you are receiving property from a spouse, parent, or another trusted person, and you are aware of the property's condition. For example, adding a spouse to the title after marriage is a common quitclaim use.
Before accepting a quitclaim, consider getting a title search and title insurance anyway. That way you can protect yourself even without the seller's warranties. State rules vary, so consult a local real estate attorney for guidance.
- Use a warranty deed for any purchase where you expect a clean title.
- Use a quitclaim only for non-sale transfers or when you fully understand the risks.
- Always consider a title search and title insurance, even with a quitclaim.
- Consult a real estate attorney if you are unsure which deed fits your situation.
Title Insurance and Deed Types
Title insurance protects against losses from title defects that may not be discovered in a search. It is separate from the deed but works alongside it. With a warranty deed, the seller's warranties back the title, but title insurance adds another layer of protection.
With a quitclaim, title insurance becomes even more important because the seller offers no protection. A title company will search public records for liens, easements, or other claims before issuing a policy.
Title insurance is usually a one-time premium paid at closing. The cost varies by state and property value. It can save you from expensive legal battles if a hidden claim surfaces later.
- Title insurance covers legal fees and losses from title defects.
- It is recommended for both warranty and quitclaim transactions.
- A title search is part of the process to issue a policy.
- Costs vary, but it is a worthwhile investment for buyers.
State Variations and Legal Requirements
Deed laws and forms vary by state. Some states have specific statutory forms for warranty deeds, while others allow any wording that clearly expresses the intent. State rules vary, so you cannot assume a deed from one state works in another.
Recording requirements also differ. To make a deed publicly known and protect against later claims, you must record it with the county recorder or clerk. This is a standard step, but the forms and fees differ by location.
Because state laws are complex, it is wise to work with a real estate attorney or a title company when preparing or accepting a deed. They can ensure the deed meets local requirements and accurately reflects the transaction.
- Each state has its own deed forms and recording procedures.
- Some states require notarization and witnesses for a deed to be valid.
- Recording the deed gives public notice of your ownership.
- An attorney can help you avoid errors that could invalidate the deed.
Sources & references
For further reading, see these general legal resources from the Cornell Legal Information Institute.
External links open in a new tab. These sources are provided for general information only and are not legal advice.