A limited warranty deed is a legal document that transfers ownership of real property from one person or organization, known as the grantor, to another, the grantee. However, this type of deed does not promise clear title; it only guarantees the title for the time period when the grantor owned the property. In contrast, a general warranty deed guarantees that the seller holds a clear title to the property and that there are no encumbrances, unknown easements, outstanding liens or mortgages against it. A limited warranty deed is most commonly used when a bank forecloses on a property due to an unpaid mortgage and then sells the property at auction. The buyer receives the property via a limited warranty deed, and the bank only promises that, while it owned the property, no claims were placed against the title. If a sign-in page does not automatically pop up in a new tab, click here How Do Warranty Deeds Work? Warranty deeds provide the purchaser of the property with the highest form of protection and are often used when a buyer wants to get financing for a mortgage or title insurance. A warranty deed guarantees that the grantor is the rightful owner of the property and has the legal right to transfer the title. The property is free and clear of all liens and outstanding claims.