May 13, 2014 9:05 am
The 2014 real estate contracts state that seller should provide a Limited Warranty Deed. This used to be a General Warranty Deed which is the best. This change has caused confusion with the sellers.
According to real estate attorneys this change took place because in the past years so many foreclosure homes were sold by the bank. It goes without saying that banks only hold title to a property for a short period of time, hence only a Limited Warranty Deed could be given.
If you have bought your house years ago in a regular sale, you should have a General Warranty Deed and can convey this to your home buyer.
Anyway, always call your attorney for legal real estate advice. The real estate industry hopes that the contracts will once again state General Warranty Deed next year.
In the meantime, always buy Title Insurance for yourself when buying a home. Your Lender does it, so why wouldn't you?
General Warranty Deeds
A general warranty deed guarantees that the grantor (seller) has good title to the property and has the right to sell it. This warranty basically ensures a buyer that she will receive good legal title. Many years of unbroken "chains" of title with grantors (sellers) conveying general warranty deeds to grantees (buyers) typically ensures that future owners will face no title challenges. Procuring title insurance to defend any challenges is typically easy.
Special Warranty Deeds
Special warranty deeds guarantee that the grantor (conveyor) owns the property and has had no title problems during his period of ownership. This document offers buyers more protection than a quitclaim deed, which makes no warranties that the grantor actually owns the property, nor does it guarantee that the seller has the legal right to sell. Therefore, special warranty deeds are better than a quitclaim document, but not as secure as general warranty deeds.