In The Know – When Buying Bank Owned Or Forclosure Properties


A common question among Buyers in this Real Estate Market when purchasing Bank Owned or Foreclosure Properties is; “Why is a Special Warranty Deed and not a General Warranty Deed given on this property”?

Special Warranty Deed versus General Warranty Deed

Here is a great explanation given in simple terms by a Title Officer at Stewart Title.

“Special Warranty Deeds are becoming more common.  A General Warranty deed is a promise to the Buyer that the Seller will warranty any prior problems with Title, not just during the Seller’s ownership, but back along the chain of ownership.  

A Special Warranty deed, on the other hand, limits the Seller’s promise (warranty) to title problems that come up while the Seller owned the property, but gives no warranty for problems prior to that point.  For example, Builders often give Special Warranty deeds.  They only owned the property long enough to build the homes.  They aren’t sticking their necks out to warranty buyers against something that happened to cloud title when the subdivision was still a pig farm.  

Foreclosure property is another example where you often see Special Warranty deeds.  The Bank, like the Builder, has no close relationship to the property and won’t bend over backwards to promise anything about the condition of title before they acquired the property through foreclosure.”  

Jayne Boyle of Stewart Title explains, “These days, Title Insurance is the Buyer’s best friend.  Title Insurance insures the Buyer against past ownership problems, old liens, boundary issues, etc.” 

And now YOU are in THE KNOW! 


To contact Debbie – 425-750-4970


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