A warranty deed is a document that protects someone as property is transferred to the purchaser. Once a warranty deed is in place, the person named on that deed is the sole owner of that property and no other lienholder has claim to it. The opposite of a warranty deed is a quitclaim deed, also known as a nonwarranty deed. A quitclaim deed is often used when transferring property between two people who are acquainted. Often in a divorce, for instance, one spouse will terminate their interest in the property by transferring full ownership to the other spouse via a quitclaim deed.
What Is a Warranty Deed?
You’ll often see warranty deeds used in the closing process when you buy a home. It needs to be signed in front of a notary, who will also provide a signature to make it legal. The deed is then taken to the county clerk, who files the document and makes it part of the record. At that point, if any questions arise regarding ownership of that property, one visit to the county clerk’s office clears things up.
Before selling your home, you’ll need to resolve any liens or claims against your property. When you sell, the warranty deed transfers ownership of your home to the buyer, certifying that any claims will remain with you rather than the new owner. In addition to general warranty deeds, there are also special warranty deeds, which simply state the property is free of claims during the new owner’s time there; a grant deed, which is similar to the general deed except it doesn’t secure you against claims from outside parties; and a bargain and sale deed, which doesn’t offer protection against claims and is often used in a foreclosure sale.
Warranty Deed Versus Title
Warranty deeds are often confused with titles, which establish your ownership of a property. The title gives you the right to modify or transfer the property as you wish, as long as you only make those adjustments to the part of the property in which you hold the title. The title is not a piece of paper. Instead, it is simply a concept, stating that you own the property.
If someone wants to verify that you hold title to property you own, that person would go to the county clerk and pull the deed that has your name on it. When you sell a property, the deed is the document you will transfer that gives the new owner title to that property.
Does a Warranty Deed Prove Ownership?
A warranty deed serves as proof that on the date you bought a piece of property, its previous owner transferred it to you. Whether it was 20 years ago or two months ago, once that deed is on file with the county clerk, it serves as an answer if a question ever arises as to ownership.
However, it’s important to note that if you are still making payments to a lender each month, you are not the actual owner of that property. If you suddenly stop paying that mortgage, your lender has every right to sell the property after following local laws regarding foreclosing for nonpayment. Once you’ve paid your mortgage in full, though, full ownership reverts to you.
How to Get a Warranty Deed
Although you can make a warranty deed online for free using one of the templates available out there, it will still need to be signed, notarized and filed with the county clerk to be official. If you purchase a house, the warranty deed will be in the endless stack of papers you sign at closing and your title agent should take care of recording the deed with the county.
If you need a copy of your warranty deed, first search through your copy of the papers you signed when you closed on your house. A visit to the county clerk’s office may be in order if you can’t find it, though. Although each county has its own procedures, this will likely be the easiest way to expedite the process. You’ll pay a fee and a clerk will pull the paperwork for you.
Property ownership is a huge investment, so it’s important that you do whatever you can to ensure that ownership is on record. This will likely be taken care of with a warranty deed when you make the purchase, but you can check with your county clerk if you have doubts.
Stephanie Faris has written about finance for entrepreneurs and marketing firms since 2013. She spent nearly a year as a ghostwriter for a credit card processing service and has ghostwritten about finance for numerous marketing firms and entrepreneurs. Her work has appeared on The Motley Fool, MoneyGeek, Ecommerce Insiders, GoBankingRates, and ThriveBy30.