Warranty Deed

Definition of 'Warranty Deed'


A document that may be used to legally transfer property. A warranty deed states that the owner can legally transfer the property and that no other entity has a claim or lien on it. These deeds are typically used in property sales and make warranties about the property’s title.

Investopedia explains 'Warranty Deed'


A warranty deed usually includes a legal description of the property, the names of the grantor (who is transferring the property) and grantee (who is taking ownership), and language conveying ownership from the grantor to the grantee. A warranty deed, in conjunction with title insurance, is necessary to secure the grantee’s valid ownership interest and gives the grantee legal recourse against any future claims to the property.

Contrast a warranty deed with a quitclaim deed, which releases an entity’s interest in a piece of property without guaranteeing that it has any interest in or rights to the property. For this reason, a quitclaim deed is not as useful in transferring ownership, since it only ensures that a particular entity does not think other outside entities have any claims to that property.

Quitclaim deeds are commonly used to transfer property between family members, whereas warranty deeds offer greater protection and are used to transfer property in a sale. 



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