What Is A Quit Claim Deed (And How It Can Save You Money When Selling Your House)
A quitclaim deed is a legal document used to transfer an interest in real property (like land or a house) from one person to another. The person transferring the property is known as the grantor while the person to whom the property is being transferred is a grantee. In a quitclaim deed, the grantor does not make any warranty that he or she owns a clear and legal title to the property being transferred.
What Is A Quitclaim Deed Used For?
A quitclaim deed is used in cases when you may need to quickly transfer real property without the assurances that other types of deeds give to the new owner. Such cases include:
- To remove a spouse’s name after a divorce. For instance, James may want to transfer a property to Laura, who is his ex-spouse, as part of a divorce settlement.
- To add a new spouse to the title after marriage.
- To transfer real property to a child, siblings, and other family members
- Real estate planners can use quitclaim deeds to transfer property to an heir or into a trust.
- Can be used to bequeath property to someone in a will upon death
- Transfer interests between business partners
- Quitclaim deeds are quick fixes to clouds on titles during reals estate transactions. For instance when a seller’s ex-spouse has a residual interest in a property, a quitclaim deed can be used to quit the ex-spouse before a regular real estate transaction
- A quitclaim deed can also be used when a title insurance company finds a potential additional property owner and wants to ascertain that this person does not claim ownership in future. In such a case, the person will be asked to sign a quit claim.
Differences between a Quitclaim Deed and a Warranty Deed
Quitclaim and Warranty Deeds are essential documents in all real estate transactions. Both are necessary for the legalization of property transfer from sellers to buyers and are vital to sales transactions. Although the two documents have similar functions, they offer different levels of buyer protection.
A quitclaim deed is different from all other deeds in the state that it does not give any guarantees, warranties or assurances with the transfer of ownership. Quitclaim deeds are commonly used when transferring property without selling.
What You Need to Know Before Selling Your House Using a Quitclaim Deed
You can legally sell your property using a quitclaim deed since there is no law that prevents you from conveying your property’s ownership to another person. However, there are some financial and contractual obligations that may prevent you from selling a quit claim deed title house.
Quitclaim deeds are mostly used when the grantor and grantee have an existing relationship, and they are hardly used to transfer property from a seller to a buyer in a traditional sale of the property.
Most real estate contracts require the seller to provide a warranty deed guaranteeing that he/she has the right to sell the house, and that he has a clean title. Also, many lenders will not finance a transaction in which a warranty deed does not convey the title to the property. Although it is possible to sell your house using a quitclaim deed, it is practically impossible to use a quitclaim deed as the only document in many transactions.
A quitclaim deed acts as an estoppel against the grantor who might want to claim an interest in the house quitclaimed to the grantee. Estoppel is legal bar that prevents a person from asserting a fact that is inconsistent with a position the person had initially taken
Requirements of a Quitclaim Deed
There are specific requirements for completing a quitclaim deed in each state. Here are some of the general requirements
- Names of the grantor and grantee
- Legal description of the property
- Name of the county where the property is located
- Consideration or the amount the grantee pays for the property interest
- Signature of a notary public
- The signature of the grantor
In some states, the signature of the grantee is required. A few other states require the signatures of witnesses.
The completed quitclaim deed must be filed in the land records office in the county where the property is located.
Dangers of Using a Quit Claim Deed
If you intend to sell or purchase a real property, there are relevant statutes and regulations that you first need to through to minimize risks. Here are some of the dangers of conveying or accepting a real property via a quitclaim deed
Buyers need to know that by accepting a quit claim deed title house they are buying the least amount of buyer protection that buying via any other deed
Rights
A quitclaim deed does not guarantee that the person giving up ownership rights had any rights in the first place. For instance, Mathew conveys his right to the Gipsy House through a quitclaim deed to Sally. Unfortunately, Mathew had no rights to the Gipsy House and so Sally has the same rights with Mathew, which, in this case, is no rights.
Liens
Lien is a right to keep possession of property belonging to someone else until a debt owed by that person is discharged
When you convey a property through a quitclaim deed, all the encumbrances (legal liabilities) attached to the property remain. If a quit claim deed title house has liens against it, the person to whom you have conveyed it is responsible to pay off those liens.
Responsibilities
It is important to note that a quitclaim deed only affects property ownership, and the name on the deed and not the mortgage. For instance, when the document is used to settle a divorce, and both spouses’ names are on the property loan, the two are still responsible for the loan.
Tax Implications
When you receive property through a quitclaim, you handle all the property taxes levied against the property. Such taxes are based on the assessed property value.
Reversing a Quitclaim Deed
It is difficult to reverse a quitclaim deed once it’s been signed and delivered. The transfer is final and cannot be reversed unless the grantee quitclaims the property back. If the grantee does not agree, then the grantor must prove that the transfer was invalid by proving that the quitclaim deed was signed under external pressure, threats or that the grantee lied.
Obtaining a Quitclaim Deed
Quitclaim deeds forms for purchase can be found in legal print shops, an office supply stores, and online retailers. Many states have free generic forms available online, and these forms are acceptable at any county recorder’s office in the state.
You may choose to prepare a quitclaim deed yourself at a low cost or hire the services of a lawyer or title company. A lawyer will either charge an hourly fee to prepare a quitclaim deed or a flat fee. Rates vary by the law office and state, but typically the costs range from $200 to $400 per hour. In many states, title companies routinely prepare quitclaim deeds at an average of $100 to $ $200 for a simple quitclaim deed. There is no specific pricing mechanism, so you need to do your research for the best rate.
Many websites including RocketLawyer, LawDepot and LegalNature.com offer free quit claim deeds in exchange for your information. Other sites such as LegalZoom.com charge a marginal fee to review and file a quit claim deed for you.
If you need to sell a property and are not sure where to begin, let us know below. When we buy houses from the public, seller do not have to worry about closing fees, filing or recording fees. We take care of everything, including which type of deed to use.
Comments
My ex and I are both listed on the deed but only his name is on the mortgage loan. He wants to use a quit claim deed to sign over his interest in the property (he has moved out of state with no intention of returning) to me. He has not been making the mortgage payments. If I were to sell the house, would I be liable to pay off the mortgage loan? Any insight would be appreciated.