Special Warranty Deed vs General Warranty Deed in Texas: What Buyers Must Know Before Closing

When buying a home in Texas, most buyers focus on price, location, inspections, and financing. But one of the most important — and often overlooked — elements is the type of deed used to transfer ownership.

The difference between a General Warranty Deed and a Special Warranty Deed can significantly impact your legal protection, financial risk, and long-term security.

In this guide, we’ll break down what these deeds mean in Texas, how they differ, and why a Special Warranty Deed may not be advisable for most buyers.

What Is a Warranty Deed in Texas?

A warranty deed is the legal instrument that transfers ownership (title) of real property from the seller to the buyer. It also defines what level of legal protection the seller provides regarding the property’s title.

In Texas, the two most common warranty deeds are:

• General Warranty Deed (GWD)

• Special Warranty Deed (SWD)

While both transfer ownership, the protections they provide are very different.

General Warranty Deed in Texas (Best Buyer Protection)

A General Warranty Deed offers the highest level of protection available under Texas law.

What It Guarantees:

The seller warrants that:

• They legally own the property

• The title is free from undisclosed liens or claims

• No title defects exist — even those that occurred before the seller owned the property

• The seller will defend the buyer against any title claim, regardless of when it originated

Why Buyers Prefer a General Warranty Deed:

✔ Maximum legal protection
✔ Covers the entire ownership history
✔ Standard for most residential resale transactions
✔ Preferred by lenders and title companies

In simple terms:
A General Warranty Deed protects buyers against all past, present, and future title issues.

Special Warranty Deed in Texas (Limited Buyer Protection)

A Special Warranty Deed only protects the buyer from title defects that occurred during the seller’s ownership period.

What It Guarantees:

The seller only warrants that:

• They did not create any title problems while they owned the property

What It Does NOT Cover:

❌ Title defects from previous owners
❌ Old liens
❌ Prior boundary disputes
❌ Heirship or probate claims
❌ Recording errors

In simple terms:
A Special Warranty Deed says:
"Nothing bad happened while I owned it — but I make no promises about anything before me."

General Warranty Deed vs Special Warranty Deed in Texas (Comparison Table)

Why a Special Warranty Deed May Not Be Advisable for Buyers

While Special Warranty Deeds are legal and common in certain sales, they carry increased risk for buyers.

1) Limited Legal Protection

If a title defect occurred before the seller purchased the property, the buyer typically has no legal claim against the seller.

This could include:

• Old contractor or tax liens

• Unreleased mortgages

• Boundary or survey disputes

• Heirship and probate issues

• Recording mistakes

2) Greater Dependence on Title Insurance

Because seller protection is limited, buyers must rely heavily on title insurance to catch and cover problems.

If the title policy:

• Has exclusions, or

• Misses a defect

➡ The buyer may face major financial exposure.

3) Common in Higher-Risk Transactions

Special Warranty Deeds are frequently used by:

• Banks (REO / foreclosures)

• Builders

• Relocation companies

• Estate sales

• Investors

• Corporations

These sellers often lack complete knowledge of the property’s history, increasing the chance of undiscovered title issues.

4) Potential Financing Delays or Issues

Some lenders require:

• Additional title review

• Expanded title insurance coverage

• Corrective title work before closing

This can delay closings and increase buyer costs.

When Special Warranty Deeds Are Common in Texas

Special Warranty Deeds are frequently used in:

• New construction sales

• Bank-owned properties

• Estate and probate sales

• Corporate relocations

• Investment properties

While not inherently bad, they require careful due diligence.

Best Practices for Texas Buyers Accepting a Special Warranty Deed

If a Special Warranty Deed cannot be avoided, buyers should:

✔ Use a reputable Texas title company
✔ Obtain comprehensive owner’s title insurance
✔ Carefully review Schedule B exceptions
✔ Confirm survey, lien, and access coverage
✔ Work with an experienced real estate professional

Final Thoughts: Which Deed Is Best in Texas?

A General Warranty Deed offers the strongest buyer protection and should always be requested when possible.

A Special Warranty Deed introduces additional risk and should only be accepted after careful review and professional guidance.

Need Expert Guidance Before Buying or Selling in Texas?

Understanding contracts, deeds, and title issues can save you thousands of dollars and countless headaches.

If you’re buying or selling in San Antonio, New Braunfels, Austin, or the Texas Hill Country, I’d be happy to help guide you through every step.

📞 Call or Text: 210-392-8088