My aunt passed away recently and left her house to us (six nieces and nephews) since she and my uncle had no children.

We are in the process of selling the house in Arkansas (we all live in Michigan) and are trying to deal with everything long distance.

The lady from the Title Insurance office said that we all have to sign off on the property, spouses included, in order to sell the house. This is fine. That's what we want to do.

She wants us all to sign a warranty deed instead of a quit claim deed. She said you would only use a quit claim deed if you are giving the property away, not selling it.
Is this true? We are all willing to sign off this and sell but we do not want to be liable years from now for anything regarding the property. Isn't a quit claim deed the safer route to go for the seller?

We have been dealing mostly with our real estate agent, and was a little surprised that the title insurance company would call us directly and not work through her.

Quick claim is safer to the seller, but not the buyer, most likely the buyer will not be wiling to pay as much if they do not get a warranty deed.

But if the title is clear and both buyer and seller is using title insurance.
If I was a buyer and all of a sudden the seller was not offering a warranty deed, it would be a dozen red flags

Thanks for your response - I'm trying to understand the difference between the warranty deed and the quit claim deed. From what I am hearing from others you should always do a quit claim deed not a warranty deed. Your response leads me to believe the reverse.
In our case, I don't think we would have any problems regarding the title of the property since my aunt and uncle have lived there since 1959, but it makes me wonder - when should you use a quit claim deed?

Actually I think Chuck wrote it backwards. The Warranty deed is better for the buyer, not the seller. In a warranty deed the sellers are giving a guarantee that there are no encumbrances on the title. A warranty deed can make them personally responsible if some blot on the title turns up, even if there is title insurance purchased.

In a quit claim deed, the seller is stating that they are transferring any interest they have in the property to the buyer. It doesn't matter whether they have no interest, there is no guarantee the seller has the right to sell.

This is what title insurers exist for. They are supposed to research the title and guarantee it. So the fact that the title insurer wants you to do a warranty deed indicates to me that they are either being lazy or they haven't been able to verify clear title.

Thank you Scott that was very helpful.
The comment we received from the Title Insurance office when my sister first questioned her about the warranty deed and requested the quit claim deed was "What do you want that for? You only do a quit claim deed when you're giving the property away, you use a warranty deed when you are selling it." Does that make sense?

Actually no, it doesn't. Obviously a warranty deed is better for the insurance company. As far as I know, quit claim deeds are the more common instrument for transferring ownership.

That's how I understood it to, Thank you so much, I'm glad you responded!

I'm wondering if this is a difference of wording between states? I've seen Grant Deeds, and now am dealing with a Special Warranty Deed, which I am told has another name in some states.

There are definitely differences between states as far as language but the basics are all the same. With a quit claim deed the seller is transferring whatever ownership interest they may have, but they don't guarantee that they have any interest and they don't guarantee the quality of the title. With a limited or special warranty deed the seller is guaranteeing that they have an ownership interest and they're also guaranteeing that they haven't done anything that will cloud the title such as allowing liens to be placed on the property. With a complete warranty deed the seller is guaranteeing that they have an ownership interest and they are also guaranteeing that the title is completely clean as far back as is possible to check.

The most common deed I've seen used in a standard sale transaction is a limited warranty deed. In NJ it's called a Bargain and Sale Deed with Covenants Against Grantor's Acts. The only time I have ever seen a quit claim deed used was when the transfer was between family members.

Obviously the best type of deed for a buyer to get is a warranty deed. But as long as the title company issues a policy that insures the title without any special exceptions then a quit claim deed is acceptable. It's just that a title insurance company will not want to issue a full policy when a quit claim deed is used in a standard transaction.

To the OP: If the title company will accept a limited warranty deed from all of the nieces and nephews then that should be OK for all of you. All you'll be doing is guaranteeing to the seller that each of you, individually, have not done anything to cloud the title. Make sure you read the language of the deed to confirm that's what it says.

The title of this Warranty Deed is: Warranty Deed with relinquishment of Dower, Homestead and Curtesy.
One line in the document that sent up a red flag for me was "And we, the said Grantors, hereby covenant that we are lawfully seized of said land and premises, that the same is unencumbered, and that we will forever warrant and defend the title to the said land against all legal claims forever."
The lady at the title office said that they did a 40 year search and everything is clear. And that if any issues come up after the closing that title insurance underwriter must defend the title. What about before the 40 years? Will they only defend the years they researched? Am I making a mountain out of a molehill?

No no no. They are asking you to sign a full warranty deed. That should not be necessary. You would be responsible if something came up that was beyond the time they searched.

Since you took title by inheritance, tell them you will give them a limited or special warranty deed.

Thanks for your help!