When transferring ownership of real estate, you need a deed to make the transaction official. A deed is a legal document that officially transfers the title of a property from one person to another. A quitclaim deed is a type of deed used to transfer the title of a property in a faster, yet higher risk manner, and it’s usually done between two trusted individuals.
What does a quitclaim deed do?
A quitclaim deed transfers the title of a property from one person to another, with little to no buyer protection. The grantor, the person giving away the property, gives their current deed to the grantee, the person receiving the property. The title is transferred without any amendments or additions. So, if the grantor has what someone would consider a “bad” title, that means the grantee is receiving it as is. Therefore, quitclaim deeds are often used between family members or to simply fix an error in the original title.
Quitclaim deeds can also be called quit claim deeds, quick claim deeds and quitclaims.
When to use a quitclaim deed?
There are several scenarios where a quitclaim deed can be a convenient option:
- Marriage: allows you to easily add your spouse to your title.
- Divorce: if you get divorced and need the title transferred to you or your ex-spouse.
- Wills: If someone passes and they’ve granted the title to a friend or relative.
- Gifts: if you’ve gifted someone your property and want an easy, less costly title transfer.
- Fixing errors in titles: if there is an error in the title of your house and you need it updated.
As you can see, each transfer involves two trusting parties where the risk of a bad title agreement is usually low. These aren’t the only instances where you’ll see the use of a quitclaim, but they are the most common.
How does a quitclaim deed work?
If you’re looking to transfer the ownership of a property quickly between two trusted parties, you might want to use a quitclaim deed.
To start, you’ll fill out a form for a quitclaim deed. This usually includes the name of the grantor, the grantee, a description of the property, when you want the property transferred and other basic details specific to your transaction. The form will be signed by both parties and requires a notary to legitimize the document. The document is then filed at a local county clerk’s office.
It’s important to note quitclaim deeds do not directly affect a mortgage. The mortgage is a separate document that the guarantor continues to be responsible for after granting the property to someone else, unless they’ve paid off their mortgage or there is a legal transfer of the mortgage to the grantee.
Remember that quitclaim deeds may vary depending on your local laws.
Quitclaim vs. warranty deeds: what’s the difference?
A warranty deed is another, more common way to transfer a title in real estate. It’s common in sale and purchase transactions and offers more protection to both the buyer and the seller. It takes longer and is more formal than a quitclaim title transfer. Warranty deeds involve monetary compensation and legal clauses that protect the buyer against any liens or future title issues. You will likely use a warranty deed when you purchase your primary residence. That’s not to say quitclaim deeds are uncommon or not needed, but they’re used in different types of transactions.
Quitclaim deeds are a popular way to get real estate transferred between two trusted parties in a fast and efficient way. As the potential new owner in a quitclaim transaction, it’s important to remember that you’re inheriting a title as is, which is why this transaction is less common than a warranty deed in a traditional sale and purchase real estate agreement.