Warranty Deed vs. Quitclaim Deed: Clearing Up the Confusion for Home Sellers in South Carolina

Selling a home is one of the most significant financial transactions most people will ever go through. While finding the right buyer and negotiating a fair price are priorities, home sellers in South Carolina also need to understand the legal nuances surrounding warranty deed vs quitclaim deed in transferring property ownership.

Two of the most common types of deeds used in real estate transactions are warranty deeds and quitclaim deeds. At a glance, they may seem similar – both are meant to legally convey rights and interests in a property from one party to another. However, there are critical differences between these deeds that every home seller should be aware of.

Misunderstanding the purpose, guarantees, and implications of using a warranty deed vs. a quitclaim deed could expose you, as the seller, to substantial legal liability. Or it could fail to provide your buyer with the proper protections they need to take ownership with confidence.

With so much at stake financially, it’s crucial for home sellers in South Carolina to clear up any confusion about these two types of deeds. Having a firm grasp on when to use each one and what obligations they convey can help prevent costly mistakes and legal headaches.

In this guide, we’ll explain the key differences between warranty deeds and quitclaim deeds and why understanding these deeds is important for South Carolina home sellers.

What is a Warranty Deed?

propety deed

A warranty deed is a legally binding document commonly used to transfer real estate ownership from one party (the seller/grantor) to another (the buyer/grantee). When a home seller provides a warranty deed to the buyer, they guarantee they hold full and clear title to the property being conveyed.

By executing a warranty deed, the seller is making several covenants or guarantees to the buyer:

  • Covenant of Seisin – The seller owns the property and has the right to convey title.
  • Covenant of Quiet Enjoyment – The buyer can occupy and use the property without interference from others claiming ownership rights.  
  • Covenant Against Encumbrances – The property is free of undisclosed liens, mortgages, easements, or other encumbrances that could impact ownership.
  • Covenant of Further Assurance – The seller will take any future actions needed to legally transfer a clear title.
  • Covenant of Warranty – The seller warrants and will defend the buyer’s title against any claims on the property.

A warranty deed is a legal guarantee to the buyer that the seller holds proper title and the right to transfer it. This assurance provides a significant layer of protection should any ownership issues, defects in the title, or claims against the property arise after the sale.

For home sales in South Carolina, warranty deeds are widely used and legally required for most real estate transactions in order to properly convey a valid and marketable title to the new buyer. The guarantees help facilitate a secure transfer of ownership rights.

What is a Quitclaim Deed?

In contrast to a warranty deed, a quitclaim deed provides far fewer guarantees when transferring real estate ownership interests. With a quitclaim deed, the seller (grantor) only transfers or “remising, releasing, and quitclaiming” whatever ownership rights and claim to the property they currently have at the time of conveyance.

However, a quitclaim deed offers no warranties or assurances about the quality or extent of the title being transferred. The seller makes no covenants or guarantees that they have a valid ownership interest or that the title is free and clear of any other potential claims or encumbrances.

Essentially, the buyer of a property via quitclaim deed is purchasing the real estate “as-is,” putting the entire risk and responsibility on them to verify a clear title chain and resolve any issues that may exist. There are no protections for the buyer if ownership disputes or undisclosed liens later arise after the transfer.

While providing less legal protection, quitclaim deeds are commonly used in certain specific situations, such as:

  • Transferring property between family members as gifts
  • Assisting in dissolving a marriage/divorce by removing one spouse from the deed  
  • Clearing up a cloud or defect on a current title
  • Assigning property into a revocable living trust

So while warranty deeds are the standard for an arms-length real estate sale, quitclaim deeds have their place for transactions between parties that have a level of built-in trust and limited liability concerns. However, most buyers looking to acquire a clear and marketable title would want the protections of a warranty deed instead.

Key Differences Between Warranty and Quitclaim Deeds

Now that we’ve explored what warranty deeds and quitclaim deeds are, let’s summarize the crucial differences between the two:

Ownership GuaranteesWith a warranty deed, the seller guarantees they hold valid ownership and can legally transfer every right and interest in the property.A quitclaim deed transfers whatever interest the seller has, if any, without warranties.
Title Assurances  A warranty deed contains covenants that the title being conveyed is clear of any defects, liens, encumbrances, or other claims against the property. Quitclaim deeds provide no such assurances about the status of the title.
Liability for DefectsIf title issues or ownership claims arise after closing with a warranty deed, the buyer would have legal recourse against the seller for making invalid guarantees.The seller assumes no liability with a quitclaim deed.
Protection for BuyersThe warranties and covenants in a warranty deed act as a significant form of buyer protection.Quitclaim deeds offer no protections, placing the full risk on the buyer to accept the title as-is.
Common Use CasesWarranty deeds are widely used for traditional real estate sale transactions. Quitclaim deeds are more common between family transfers, adding/removing someone from an existing deed, or clearing title clouds.

A warranty deed provides valuable guarantees that facilitate the secure transfer of a valid and marketable title. Quitclaim deeds are limited-risk quick transfers without certifications. Proper use comes down to the relationship between parties and the required level of legal protection for the transaction.

When Title Issues Arise for Home Sellers

While warranty deeds offer important protections during a real estate sale, those covenants can become a legal liability for the seller if any outstanding issues with the property’s title are later discovered. Common title Problems that may surface include:

Outstanding Liens or Mortgages

If the previous mortgage or any other loans secured by the property were not fully paid off and released, those lenders still have a claim on the title.

Unpaid Property Taxes  

Delinquent taxes, whether from the current or previous owners, can result in a tax lien being placed against the home’s title.

Contractors’ Liens

Unpaid bills from contractors who performed recent work on the home can allow them to file a mechanics’ lien on the property title.

Legal Judgments

Any court judgments or settlements against the previous owner that remain unsettled can create a claim on the title.

Ownership Disputes

Challenges over the legal ownership interests, such as contested wills or deeds, can cloud the title until resolved.

For a traditional home sale listing, the seller is expected to resolve any issues preventing the successful transfer of a clear, marketable title to the buyer. Depending on the situation, this may require requesting lien release documents, paying off outstanding debts, or even filing a “quiet title” legal action.

Failing to remedy title defects puts the seller at risk of breaching the warranties and covenants made with the deed. This could open them up to potential lawsuits or financial claims from the buyer down the road if problems are discovered later.

Resolving title issues can be lengthy and complicated, involving attorneys, title professionals, and court actions. These barriers often delay home sales for months until a clear title is finally obtained.

Cash Offers: A Game-Changer for Sellers with Title Problems

Home sellers in South Carolina facing complicated title issues like liens, judgments, or ownership disputes may have better options than a traditional listing. Sellers are typically expected to resolve any title defects upfront, which can take months and require costly legal actions.

However, selling to an experienced cash home buyer like JMS Home Buyers provides an alternative solution that can save tremendous time, hassle, and expense. Unlike a conventional sale, cash buyers purchase properties as-is, including homes with existing title problems.

This allows sellers to walk away quickly from a problematic title situation without getting bogged down in legal matters. The cash sale seamlessly transfers ownership, with JMS Home Buyers taking on the responsibility of resolving any title clouds after purchasing.

Their ability to buy properties with defective titles provides sellers a truly hassle-free exit strategy. Rather than dealing with warranties and liabilities, the home transfers as-is for a fair, negotiated cash payout. Sellers can cut ties, avoid risks, and move on quickly.

Conclusion

As a home seller in South Carolina, understanding the differences between warranty deeds and quitclaim deeds is essential knowledge. Warranty deeds provide critical legal protections by guaranteeing the seller has proper title to convey. Quitclaim deeds offer no such assurances, simply transferring whatever interest the seller currently holds.

When title issues like outstanding liens, legal judgments, or ownership disputes cloud the property’s title, selling through a traditional real estate listing requires resolving those problems first. This can involve lengthy legal processes, attorney fees, and significant delays in closing.

However, a cash home buyer like JMS Home Buyers provides a simplified solution. They purchase properties as-is, taking on the responsibility and risks of clearing any title defects after the sale. No more delays trying to untangle complicated title issues yourself.

If you’re a South Carolina home seller looking to avoid the hassles of dealing with title problems, reach out to JMS Home Buyers today. Their team can discuss your specific situation, answer any questions, and provide an obligation-free cash offer. 

Call JMS Home Buyers at 704-707-6016 to get started. They’ll gladly walk you through their simple cash offer process for properties with title issues or other challenges. Get rid of that problem property once and for all with a fair cash payout.

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