“A general warranty deed guarantees that the new owner will have good title free of any encumbrances, debts or liens, and that the seller or grantor also agrees to defend the title against any third-party claims,” says Whitman. “A grant deed, by contrast, doesn’t include any agreement to defend the title against claims.”

A special warranty deed is similar to a general warranty deed, except that the grantor only guarantees a title free of liens, debts or encumbrances during the time the grantor owned the property — the deed does not guarantee that title issues did not exist prior to the grantor taking ownership. A special warranty deed is often used for the transfer of a trust or estate.

Other types of deeds

Grant deeds also differ from quitclaim deeds, also called “as-is” deeds, in that quitclaim deeds aren’t all-encompassing. Quitclaim deeds are commonly used when property is transferred in a divorce or as a gift, or in estate situations when all heirs quitclaim their interest to the buyer.

“A quitclaim deed provides the least amount of protection, with the grantor not guaranteeing any title claims,” says Sarah Stitgen, an attorney with Atlanta-based Cook & James. “It simply states that the grantor transfers whatever interests they have to the grantee.”

There are also special purpose deeds that may be used in certain circumstances, such as during court proceedings. These deeds, however, don’t provide any strong protections to the buyer or grantee. These special purpose deeds include:

• Tax deed, used when ownership of a property transfers to the government due to unpaid taxes
• Deed in lieu of foreclosure, used when ownership of a property transfers to the bank or lender in order to avoid foreclosure
• Executor’s deed, used when the owner of a property passes away and the estate’s executor transfers property to a grantee named in the will
• Deed of gift, used when the property is gifted to the grantee from the grantor without any money involved

Bottom line

Although grant deeds have a purpose, there is no warranty attached to them, so tread carefully when involved in a real estate transaction that includes one. It’s best to enlist a real estate attorney and title company when dealing with this type of deed.

“For instance, there could be a tax lien or mechanic’s lien that you as the new owner will have to pay to ensure clear title to the real estate,” says Whitman. “The only way to be sure you are protected from clouded title issues like this is to have a real estate attorney review your title documents before you close on a purchase.”

Even still, check the description on the deed yourself. Sometimes, an attorney or their paralegal simply copies from the prior deed, which could contain errors.

To further help protect yourself, consider purchasing an owner’s title insurance policy, as well, recommends Whitman. This is different from the lender’s policy a mortgage lender requires you to buy, and covers you as the owner. In the title search, be sure the title company looks for any breaks in the chain of title, liens, unsatisfied encumbrances and separately recorded restrictions.

Learn more:

• Can you transfer a mortgage to someone else?
• Divorce and your mortgage: Here’s what to know
• Gift tax: What it is, how it works and who has to pay it