A warranty deed is a legally binding document that transfers the ownership of a property from the current owner to a new owner. This type of deed allows the seller to make specific promises to the buyer regarding the title itself. These typically cover title defects such as judgments, claims of ownership by other parties, liens, and prior mortgages. The warranty deed includes the agreed upon price between buyer and seller.
Buyers and sellers alike prefer the warranty deed as a method of transfer due to the protections it offers both parties. Those who have an interest in a property should consider creating a warranty deed online if they meet any of the following conditions:
Desire to transfer the ownership of a property to a trust
As a means of finalizing a property purchase with an individual
To buy or sell real property as the owner of a business
As protection against problems with the title described above
Other names for a warranty deed include full warranty, general warranty deed, and grant deed.
Warranty Deed Covenants
The reason most buyers desire a warranty deed is because it offers them six specific promises, also known as covenants. At the time of the title transfer, these include that the seller legitimately owns the property, that he or she has the right to sell it, and that the title is free of defects. The buyer is also protected by the following future covenants:
Guaranteed ownership above any future claims
Seller guarantees to defend the buyer against those claims should they arise
The right of quiet enjoyment of the property for they buyer after finalization of the title transfer
Special Warranty Deeds
The buyer and seller of a property may also opt to complete a special warranty deed. However, this does not offer as much protection to buyers as regular warranty deeds do. It states that the deed was clear during the time the seller owned the property. That means he or she is not responsible for any defects of title prior to taking ownership.
With a special warranty deed, the seller does not have to pay damages to the buyer or repair any damages that occurred at that time. Like the regular warranty deed, interested parties can create a special warranty deed online that becomes legally binding once both parties have signed and filed it.
How a Warranty Deed Differs from Other Types of Deeds
A warranty deed is one of four types of real estate deeds available. Those who have a vested interest in a property should research all their options to ensure selection of the one that is most beneficial. In addition to the special warranty deed, the other possibilities include:
Quit Claim Deed: This type is most often used among family member during times of transition. For example, one spouse may transfer real property to the other in the case of divorce or a parent may transfer the title to an adult child. Quit claims deeds are also common when the property gets placed in trust.
Contract for Deed: Buyers who have difficulty securing a mortgage loan due to poor credit or lack of credit history can turn to a Contract for Deed if they can locate a seller willing to accept this arrangement. With this type of deed, the buyer makes payments to the seller while residing at the property. The two parties work it out amongst themselves how many payments the buyer must make before the seller releases his or her interest in the property.
Gathering Information to Create a Warranty Deed Online
The person creating this document should have the following information available before starting:
The name and complete mailing address of all parties whose names will appear on the warranty deed. The seller’s name must appear exactly as it does on the current property tax statement or deed for the property in question. The buyer’s name appears next. Both parties need to list their physical addresses since post office boxes are not acceptable on a legal document.
The property address, including the legal description of the property being sold and its parcel number. Sellers can find the legal description on the deed they received when purchasing the property. The parcel number is located on the property tax statement. Both pieces of information are also available at the city or county office where the property is located.
The warranty deed must include the county and state where the seller intends to sign in. Additionally, it should specify which party will receive the original deed once it has been recorded. This may be the seller or buyer as well as an attorney representing either party or a trustee of an estate.
Lastly, the warranty deed should indicate if there is any exchange of money involved in the property transfer. This is not common for simple changes to the title such as correcting the spelling of a name or when one family member is taking possession of the property from another family member. However, the amount must be specified if there is an exchange of currency.
The buyer and seller may also wish to include optional terms when creating a warranty deed online. One example is stating whether the seller can retain rights to oil or gas on the property. Another is whether the seller will retain an ownership interest in the property until the time of his or her death. The document should include specific details about any added terms, such as the percentage of oil and gas rights.
Making the Warranty Deed Legally Binding
After inputting all the above information to create a warranty deed online, the seller needs to locate a notary public and sign the document in front of him or her. The final step is to file the notarized document with the local county or city office responsible for recording property documents. The seller needs to make sure that all previously billed property tax statements have been paid in full before signing and filing the warranty deed. The document becomes legally binding once all of these steps have been completed.