Special Warranty Deed?
When you purchase a bank owned property why do they want to issue you a Special Warranty Deed instead of a normal Warranty Deed? Is there anything to be concerned with?
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When you purchase a bank owned property why do they want to issue you a Special Warranty Deed instead of a normal Warranty Deed? Is there anything to be concerned with?
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What the bank is doing is giving notice that this is a deed received from a person or company who gained the property as a result of a foreclosure sale.
In California the Trustee who conducts the sale will issue a Trustees Deed Upon Sale.
It is helpful to title companies, cause they can then check back and pick up the Title Policy issued to insure the sale. It is also helpful to the Assessor Office cause the sale is not a true at market sale but a form of forcemont. A transfer of title caused by other then the offering and sale of the property in open market.
Interesting
Cheers, Lucius.
The "special" part is that there are no warranties other than the fact that the seller is conveying whatever interest (however imperfect it may be) they have in the property. Its similiar to a quit claim deed in that they are conveying whatever they have in the property.
Similar to a quit claim deed? That doesn't sound good at all. Am I being alarmist for nothing since there will be title insurance?
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On 2003-10-29 10:06, The-Rehabinator wrote:
Similar to a quit claim deed? That doesn't sound good at all. Am I being alarmist for nothing since there will be title insurance?
I don't think you should worry. Much. A special warranty deed isn't "general" basically because the seller doesn't have a grant of deed from the previous owner. The seller's title comes from, say, a court. The seller gives you warranties, a title company will insure the title, but the title could be attacked by the previous owner on some grounds ... conspiracy by the bank, the court didn't have competent jurisdiction ... you never know. That doesn't mean your title insurance won't take care of you. It's just a tiny little residuum of legal risk that makes the warranty deed "special" rather than "general".
All deeds are passing interest from one to another:
Quitclaim - no warranties given to buyer
Bargain and Sale deed - conveys all title the grantor has but does not warrant to defend the title against attacks from future claims
Special Warranty Deed - grantor does not warrant title except against acts by the grantor's representative...it guarantees that nothing has been done to encumber the property during his/her ownership
Warranty Deed - full protection from future claims
Hope this helps!