Warranty Deed vs Quitclaim: Do You Hold a Clear Title?

Find Out if Your Deed Guarantees a Clear Title

Is your title clear and free of any defects and encumbrances? Find out the difference between a warranty deed and quitclaim deed when buying a property or home.

You don’t want a hidden claim to the property or challenge against the deed to suddenly appear and cost you the true value of your home. Are you working with a warranty or quitclaim deed? You need a warranty deed with a good title insurance policy to guarantee a clear title and avoid potential claims that may arise.

What is a Deed, and Which Type Do You Need?

If you’re about to buy a home, then you’ll want to be certain that you actually own it when you’re finished. A deed is the conveyance of what is “legally” included within the sale, but does not act as the bill of sale itself. Rather, the deed is the specifications or legal details of the property used in order to convey what is included in the sale. Deeds include information like the property lines by landmarks, square footage, and additional buildings.

Are You Covered with a Quitclaim Deed?

A quitclaim title is a lower level of protection which transfers the deed to the new owner’s name without any guarantee. In fact, the grantor may not even hold the title to the land with a quitclaim deed. These deeds are often reserved for nontraditional real estate transactions.

Quitclaim deeds are used for family matters when a property is given to a relative or granted to an heir as the product of a will. They are also used during a foreclosure to free the governing body from any liabilities for the title. In a quitclaim deed, the boundaries may be uncertain, the grantor doesn’t guarantee the property title is legal and clear, and the deed is not backed by title insurance.

Does a Warranty Deed Mean a Clear Title?

A warranty deed is a higher level of protection produced by the seller upon the real estate closing. It includes a full legal description of the property, and confirms the title is clear and free from all liens, encumbrances, or title defects.

Most property sales make use of a warranty deed. Paired with title insurance, your warranty deed guarantees that the “grantor” is the rightful owner and transfers these rights and title to you as the “grantee” or new owner of the property. With a warranty deed, your title is clear. If not, the grantor must pay for any inconsistencies in the details and compensate the buyer for any collection actions or damages accrued.

Warranty deeds paired with a good title insurance policy protect both the buyer and lender from any future disputes. However, both the warranty and quitclaim deeds are not sales documents by any means. You will need to complete additional forms to finalize the sale before the home is yours.

Have the warranty deed, and now just need a title insurance policy?

Our title agents can help. Give BNTC a call today to speak with a representative about the specifics, and we can tailor the right title insurance policy to suit your needs.

SOURCES:

Understanding quitclaim, warranty deeds on property

Difference Between a Warranty Deed & Quickclaim Deed