REO sales are a major part of the current real estate market. Most REO sellers require that the buyer sign a REO contract addendum which overrides provisions of the GAR contract. One common change is that the seller provides a Limited or Special Warranty Deed to the buyer at closing.
So, what is the difference between a General Warranty Deed and a Limited (or Special) Warranty Deed?
Under a General Warranty Deed, the seller warrants the title to the property from the beginning of time. If there is a defect, regardless of the cause, the buyer has the option of proceeding against the seller for any resulting damage. Under a Limited or Special Warranty Deed, the seller is only warranting the title during their ownership. They do not warrant anything that may have happened prior to the foreclosure (or Deed in Lieu of Foreclosure).
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