What is a Warranty Deed?
A warranty deed is the strongest form of property deed, providing the buyer with the highest level of protection. When a seller conveys property via warranty deed, they make legally binding guarantees (called covenants) about the quality of the title they're transferring. If any of these guarantees prove false, the buyer can sue the seller for damages. This is the standard deed type for most residential real estate transactions in the United States.
The warranty deed is what the title company prepares as part of a standard closing. It's the document that officially transfers ownership from seller to buyer, and its protections -- combined with title insurance -- give the buyer confidence that they're receiving clean, marketable title to the property.
The six covenants of a warranty deed
A general warranty deed contains six traditional covenants:
- Covenant of seisin: The seller actually owns the property and has the right to convey it.
- Covenant of right to convey: The seller has the legal authority to transfer the property (no restrictions from a trust, court order, or other limitation).
- Covenant against encumbrances: The property is free from undisclosed liens, easements, or other encumbrances (except those specifically listed in the deed).
- Covenant of quiet enjoyment: The buyer's ownership won't be disturbed by third-party claims.
- Covenant of warranty: The seller will defend the buyer's title against any lawful claims.
- Covenant of further assurances: The seller will take any additional actions needed to perfect the buyer's title if issues arise later.
General warranty vs special warranty
| Type | Coverage Period | Common Usage |
|---|---|---|
| General warranty deed | Entire chain of title | Standard residential transactions |
| Special warranty deed | Only during seller's ownership | Commercial, REO, entity sales |
A general warranty deed warrants the title all the way back through history. A special warranty deed only warrants against defects that arose during the seller's period of ownership. If a problem existed before the seller bought the property, the special warranty deed provides no protection against it. Banks selling REO properties and commercial sellers commonly use special warranty deeds to limit their liability.
Warranty deed vs quitclaim deed
The difference is dramatic. A warranty deed provides full guarantees about ownership and title quality. A quitclaim deed provides zero guarantees -- the grantor simply transfers whatever interest they may have, without promising they own anything. In standard real estate transactions, always insist on a warranty deed. Quitclaim deeds are for specific situations like family transfers, LLC transfers, and title cleanup -- not purchases.
Why warranty deeds matter for investors
When purchasing investment properties, the warranty deed is your first line of defense against title problems. Combined with title insurance, it creates a double layer of protection. If a title defect surfaces after closing, you can make a claim against the title insurance policy AND potentially pursue the seller under the warranty deed covenants. For wholesalers and flippers doing double closings, both the A-to-B and B-to-C transactions should use warranty deeds.