What Is the Difference Between Warranty Deed & Trustee Deed?

A warranty deed is the standard deed used in a typical purchase and sale transaction of real estate. A trustee deed, on the other hand, is a deed used to convey title after a foreclosure sale.

Generally

The warranty deed is used for everyday real estate transactions, such as when a person sells her home. A trustee deed is used only after a trustee forecloses on a mortgage, or deed of trust, and sells the property at a public auction.

Warranty Deed

A warranty deed conveys title from the seller to the purchaser. When the seller signs the warranty deed, the seller guarantees that the seller actually owns title to the property being transferred.

Trustee Deed

When a borrower defaults on a mortgage loan, also called a deed of trust, the trustee, typically a bank or attorney, will foreclose on the loan and sell the mortgaged property in a public auction. The highest bidder receives a trustee deed from the trustee. The trustee deed guarantees that the trustee followed all of the state laws relating to proper foreclosure and sale of the property.

Identification

A warranty deed is a much simpler document than a trustee deed. A warranty deed is typically a page or less, and it simply states that the seller (the "grantor") transfers all of the grantor's title to the grantee (the purchaser).

A trustee deed, on the other hand, is typically several pages long and should explain how the trustee carried out the foreclosure and sale of the property.

Expert Insight

Foreclosure is a highly regulated legal procedure. In some states the trustee must apply to a court for foreclosure, but in most states the trustee can foreclose without any court approval. The trustee deed is critical, then, to guaranteeing to the new owner that the property has been properly foreclosed upon and sold.

References

• Land Transactions and Finance; Grant S. Nelson and Dale A. Whitman; 2004.