Certified Residential Appraiser Practice Exam

What distinguishes a warranty deed from a quitclaim deed?

1. Warranty deed conveys free and clear title

2. Quitclaim deed transfers title with full warranties

3. Warranty deed requires no signatures

4. Quitclaim deed guarantees clear title

The correct answer is: Warranty deed conveys free and clear title

A warranty deed is designed to provide the highest level of protection to the buyer in a real estate transaction. It guarantees that the seller holds clear and marketable title to the property, free of any liens or encumbrances, except those expressly noted in the deed. This means the grantor (seller) offers a warranty that they will defend the title against any claims and that they have the right to convey the property. This assurance is a fundamental aspect of a warranty deed, setting it apart from other types of deeds. In contrast, a quitclaim deed offers no such guarantees. It simply transfers whatever interest the grantor has in the property, which may be none at all. The grantor does not promise that the title is clear or marketable, nor do they provide any warranties against future claims. Additionally, the concept of requiring signatures and the implications of guarantees do not apply in the same context. A quitclaim deed, for example, does not come with any assurances regarding the title's clarity, making the distinction clear between the two types of deeds. Therefore, the defining characteristic of a warranty deed being the conveyance of free and clear title accurately reflects its purpose in property transactions.