What is a general warranty deed?
You’ve finally found your dream home and you’re ready to make an offer.
But before signing on that dotted line, you want to ensure you understand all the legal jargon in the contract.
One term you may come across is “general warranty deed,” but what exactly does it mean?
You’re not alone in wondering. In fact, many homebuyers and even some sellers may not fully understand the concept.
This complete guide gives you the background to general warranty deeds, including what it is and why it’s an essential document in the home buying process.
So, let’s get started!
What is a deed?
A deed is a document that proves you own a piece of property or land. It’s like the title to your car, but for your property.
For example, let’s say you inherit a piece of land from a grandparent.
For you to officially own it, you need to get a deed that shows you’re the new owner.
Or perhaps you’re selling your house to a new family. You need to sign a deed that transfers ownership of the property from you to them.
If you ever have a disagreement with a neighbor about who owns a piece of land, you can use your deed as proof that you’re the rightful owner.
What is a warranty deed?
When buying a house, apartment, or another type of property, you need to ensure everything is in order before you commit.
That’s where a warranty deed comes in.
A warranty deed is a legal document that the seller (also known as a grantor) uses to move ownership of the property to the buyer (aka the grantee).
It includes all kinds of important details about the property, like its location and any potential issues that might come with it, such as easements or liens (legal claims of debt owners).
When you sign a warranty deed, the seller is making a promise that everything is good to go with the property and that they have the legal right to sell it to you.
It acts as a “seal of approval” that gives you peace of mind that you’re not going to run into problems in the future.
What is a general warranty deed?
Now that we’ve established what a deed and a warranty deed are, let’s talk about a specific type of warranty deed: The general warranty deed.
A general warranty deed includes all of the same information as a regular warranty deed, but with an added layer of protection.
When you sign a general warranty deed, the seller makes a few promises to you.
First, they guarantee that they’re the legal owner of the property and have the right to transfer the property’s title in a sale.
Next, they guarantee that the property is clear of all liens and that there aren’t any outstanding claims on the house/apartment from a creditor who may claim it as collateral.
This means that the property is yours to do with as you please; you don’t have to worry about any surprise claims on the property down the line.
Finally, the seller guarantees that the property’s title will remain secure against any challenges from outside parties claiming ownership.
This means that if someone comes forward and says they actually own the property, you’re protected — the seller is responsible for taking care of any legal issues that may arise.
It’s sort of like a release of liability agreement in business circles.
Let’s say you’re buying a new home, and you sign a general warranty deed with the seller.
A few months down the line, you find out that there’s a lien on the property from a creditor that the seller didn’t disclose.
Luckily, because you signed a general warranty deed, the seller is responsible for taking care of the issue.
What is the purpose of a general warranty deed?
A general warranty deed is set up to provide the grantee (buyer) with a comprehensive set of promises and assurances from the grantor (seller) regarding the title and ownership of the property being sold.
Specifically, a general warranty deed provides the grantee with a guarantee that the grantor is the rightful owner of the house or apartment and has the legal right to move the title of the property in a sale.
It also guarantees that the property doesn’t have any liens and that there are no outstanding claims from a creditor.
Additionally, a general warranty deed provides a guarantee that the title can withstand any third-party claims to ownership of the property.
By providing these promises and assurances, a general warranty deed helps to protect the grantee’s ownership and use of the property and provides a sense of security in knowing that the grantor is standing behind the title being transferred.
Who uses general warranty deed forms?
General warranty deed forms are typically used in real estate transactions by both the grantor (seller) and grantee (buyer) involved in the sale of the property.
The grantor uses the general warranty deed form to provide assurances and guarantees to the grantee regarding the title and ownership of the property being sold.
They also use it to transfer ownership of the property to the grantee.
The grantee uses the general warranty deed form to ensure that they are receiving clear title to the property, and to protect their ownership and use of the property from any potential claims or disputes that may arise.
Additionally, real estate agents, title companies, attorneys, and other professionals involved in real estate transactions may use general warranty deed forms to facilitate the sale and transfer of property.
Create your general warranty deed with PandaDoc’s template
If you’re getting ready to buy or sell a property, you might need to create a general warranty deed to protect yourself.
This doesn’t have to be a stressful undertaking.
With PandaDoc’s general warranty deed template, you can create a document that includes all the important warranties and guarantees you need.
Plus, it’s easy to use — no legal expertise required. Go ahead and give it a go, and let us help you make your real estate transaction a breeze.