What is the purpose of a Warranty Deed in a real estate transaction?

The purpose of a Warranty Deed in a real estate transaction is primarily to ensure that the property's title is free from claims. This type of deed provides a guarantee from the seller to the buyer that the seller holds clear title to the property and has the legal right to transfer ownership. It assures the buyer that there are no existing liens, easements, or other encumbrances that could affect their ownership interest after the sale is complete. If any issues arise regarding the title, the seller may be liable for resolving them, thus providing an additional layer of security for the buyer.

In contrast, transferring property insurance does not fall under the functions of a Warranty Deed; it is instead a separate aspect of real estate transactions typically handled through insurance policies. Documenting tenant agreements relates to lease agreements and does not pertain to the ownership transfer aspect that a Warranty Deed addresses. Lastly, a Warranty Deed is not a receipt for mortgage payments; instead, it conveys ownership and protects the buyer's rights to the property.