Special Warranty Deed

· 2 min read
A special warranty deed guarantees that the seller didn’t cause any title problems during the time they owned the property — but it says nothing…

A special warranty deed guarantees that the seller didn’t cause any title problems during the time they owned the property — but it says nothing about what happened before they bought it.

Unlike a general warranty deed, which covers the entire history of the property, a special warranty deed only covers the seller’s ownership period. If a lien from 15 years ago (before the seller owned it) surfaces after closing, the seller isn’t responsible.

This is a weaker protection for buyers. You’ll see special warranty deeds most often in bank sales, REO properties, and commercial transactions.

When You’ll Encounter Special Warranty Deeds

  • Foreclosures: Banks use special warranty deeds because they don’t know the property’s full history
  • REO sales: Same reason — the bank acquired the property through foreclosure
  • Commercial real estate: Common in business transactions
  • Estate sales: Executors may not know every detail of the property’s past

On a $350K foreclosure, the bank guarantees it didn’t create any title problems while it owned the home. But that old contractor lien from the original owner? Not the bank’s problem.

Watch out for: Accepting a special warranty deed on a standard home purchase. If you’re buying from a regular homeowner (not a bank or estate), you should receive a general warranty deed. A seller who offers a special warranty deed may be trying to avoid liability for known title issues. Push for a general warranty deed and make sure your title insurance is in place.

How do I protect myself with a special warranty deed?

Title insurance is your best friend here. Since the deed’s warranties are limited, your owner’s title insurance policy fills the gap. It protects you against claims from before the seller’s ownership — exactly the period the special warranty deed doesn’t cover. On a $350K home, title insurance runs $1,000–$2,000 as a one-time closing cost. It’s essential on any purchase with a special warranty deed. Read our buying guide for more on deed types and buyer protections.