In this market where REOs are more commonplace, we are finding that banks will not issue the purchaser a Warranty Deed.  I am frequently asked by buyers, what are the differences among these 3 deeds?  How will it affect the purchase?  What can I do to protect myself if I am not issued a Warranty Deed?

• WARRANTY DEED, General or Full  Is most commonly used in transactions, especially in the sale of a property.  In it the grantor gives the grantee a continuing pledge that he will protect his title against any defects arising against the title caused by either him, or any former owner.
• SPECIAL WARRANTY DEED  Conveys title by guaranteeing the grantee's title only against claims arising out of grantor's period of ownership.
• QUIT CLAIM DEED Provides no liability to the grantor.  Relinquishes whatever interest the grantor may have in a certain property to the grantee. The grantor does not guarantee that he is the owner of a certain property.

The General Warranty Deed offers the most protection, while the Quit Claim Deed offers the least.  If a bank wants to sell you the property with the latter type deed, RUN!  Fast!  Or you could ask them to issue a Special Warranty Deed in a separate addendum.  They might do it to make the sale.  Quit Claim Deeds are issued between relatives or spouses, between partners, from a person to a Trust, or vice versa, in which cases, often no exchange of money is involved.

If issued a Special Warranty Deed, try to get the bank to allow the purchaser to be represented by their own title company rather than that of the bank's choosing.  This will allow the purchaser to have some control over how to handle a defect that might appear on the title search, and to make certain that it's insured over.