Questions about a limited/special warranty deed

[J Johnson]

I have a group of investors that are purchasing some bank-owned properties from a builder foreclosure. All the properties are owned by one bank and all the properties are in a single subdivision.

Title is being conveyed by a limited/special warranty deed rather than a general warranty deed. I know that a limited warranty deed is a less common form of deed that warrants the state of title while the seller owned the property. The closing attorney will be doing the title examination prior to closing and the buyers will be purchasing title insurance.

I assume this type of title conveyance is common for foreclosures, but are there any down-sides to purchasing these type of properties through a limited warranty deed?