Special Warranty Deed - what to watch out for?

Question

I’m looking at a single-family property that has been sitting on the market for 160+ days, which obviously raises some flags worth digging into.

While reviewing the ownership history, I noticed:

• The most recent transfer was via a Special Warranty Deed
• The transfer before that appears to be an inter-family transaction

No obvious red flags jump out yet, but I don’t see Special Warranty Deeds very often outside of certain situations, so I wanted to sanity-check with the group.

One additional oddity: the listing agent has not been responsive at all — no replies to texts or returned phone calls so far, which adds to the uncertainty around what’s really going on with the property.

My understanding is that:

• A Special Warranty Deed only warrants title against defects during the seller’s ownership period, not before
• Risk is typically mitigated if a reputable title company is willing to fully insure the transaction

For those who’ve dealt with this before:

• What specific issues should I be watching for in deals like this?
• Are there scenarios where you’d still walk away even if title insurance is issued?
• Anything unique to inter-family transfers that you’ve seen come back to bite buyers later?
• Would agent non-responsiveness itself be a red flag you’d weigh heavily?

Assuming clean title and standard coverage from the title company, is this generally considered safe to purchase, or are there less obvious risks I should be digging into further?

Appreciate any real-world experiences or lessons learned.

Ying Tang · Answer

Interesting. I did my own title search and went through dozens of recorded documents. Here’s what I’m seeing:

• A conveyed the property to B via a beneficiary deed effective upon A’s death.
• A passed away (death certificate recorded).
• B conveyed the property to B and C (warranty deed).
• B and C conveyed it to an LLC (warranty deed).
• The LLC conveyed it to D (special warranty deed).
• The LLC is owned by D’s ex-husband.
• D is now selling the property.
• The LLC has owned dozens of properties historically, so the use of a special warranty deed appears consistent with an investor entity.

Ying Tang · Answer

@John Clark Thank you!

Chris Seveney · Answer

if you get title insurance, a clear title, then I do not see any issues. In many instances what we see is the listing agent as the problem. we have attempted for months to put an offer in on a property to no avail. Finally one off market we reached out to the sellers and let them know what was going on and got it under agreement and under 48 hours
let's just say they were not happy

Ying Tang · Answer

@Ken M.

By the way, would you be willing to share a recommendation for a reliable title company?

Ying Tang · Answer

@Ken M.

Thanks for laying this out! Really appreciate the insights. I’m curious — is it possible that a seller might choose to issue a special warranty deed even if they originally received the property via a general warranty deed and didn’t cause any title issues while owning it? Or is a special warranty deed always associated with some kind of problem or risk?

Ying Tang · Answer

@Chris Seveney

Update: I got some additional context from the listing agent. He said his brother sold the house to his ex-wife via a special warranty deed. She was planning to move back to the U.S., but plans changed and she ultimately decided not to return, so she listed the property about six months after purchasing it.

I have a beginner question and would really appreciate some guidance.

• Even though the last transfer was done using a special warranty deed, can I still request a general warranty deed when I purchase the property?
• If the property was never foreclosed, what are some common reasons sellers choose a special warranty deed in a situation like this?
• What would be the seller’s potential reasons for pushing back or rejecting a request for a general warranty deed?

Doug Smith · Answer

Special Warranty Deeds are commonly used in transfers such as foreclosure sales. We've purchased deals and transferred property using them many times, but you are right...it is a step down in protection from a General Warranty Deed. There might be an heir, an mechanic's lien, or some other cloud on the title they might have missed. Might I suggest having a trusted title company in your area do a full title search to ensure that there are no gremlins lurking in the chain of title that you need to be concerned about before purchasing. It's not very costly, it's quick, and it could save you a great deal of headache down the road.

Ying Tang · Answer

@Doug Smith

Update: I got some additional context from the listing agent. He said his brother sold the house to his ex-wife via a special warranty deed. She was planning to move back to the U.S., but plans changed and she ultimately decided not to return, so she listed the property about six months after purchasing it.

I have a beginner question and would really appreciate some guidance.

• Even though the last transfer was done using a special warranty deed, can I still request a general warranty deed when I purchase the property?
• If the property was never foreclosed, what are some common reasons sellers choose a special warranty deed in a situation like this?
• What would be the seller’s potential reasons for pushing back or rejecting a request for a general warranty deed?

Special Warranty Deed - what to watch out for?

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