Special Warranty vs General Warranty Deed in Texas: Buying and Selling

[Donna Johnson]

There is a property in Texas I am interested in.  The property is being offered with a Special Warranty Deed rather than a General Warranty Deed.  

Googling, I find that it is not uncommon for corporations (which the property I am interested in appears to be), to sell their properties with SWD rather than GWD since they may have aquired it during foreclosure, etc.  Looking on BP forums I've found various conflicting thoughts about warranty types.  

Checking with the 2 lenders who I have preqalified with, one seems to think it's no problem, the other is still checking with Title Dept. to find out, but feels it likely is an issue since the Lender would not be covered in a potential claim.  Anyone with recent experience with either aquiring or selling with a SWD pros/cons?   The property appears to be under-valued- is it worth the risk? Down the road when I want to sell, I'm thinking I would  also have to offer a SWD since I would have received it under a SWD?  Even if one lender gives me financing with SWD, would this make the property less desirable when selling in the future?  After 2008 there were tons of forclosures and walk-a-ways that went back to the banks etc, so it seems like a SWD might not be that uncommon? 

Thanks in advance for your thoughts!

[Wayne Brooks]

It really makes no difference whatsoever…as you will be getting title insurance, either way, and if you ever have a title issue that’s who you would go to anyway…not the previous owner.

It has effect on you or the lender, as long as you get owners title insurance (the lender will require lender’s title insurance in any case).

You can sell with General Warranty deed when you sell.