Transferring a title from one holder to another is not nearly as simple with real estate property as it is with a vehicle. A written document is necessary to convey property but if you don’t know what you’re doing, it can get complicated pretty fast.
Generally, the two types of real estate deeds issued are the general warranty deed and the quitclaim deed.
What Is A Quitclaim Deed?
If you ever sold or purchased a home in the past, you probably remember signing over or receiving a deed. That piece of paper is what provides proof of ownership of the property.
When transferring a property title from one holder to another, the deed is necessary to establish past and future ownership. The quitclaim deed transfers an interest in real property such as a house, land, or a mobile home without the property being sold. The party transferring the property over is referred to as the grantor and the party who is receiving the property is the grantee.
When Do You Use A Quitclaim Deed?
As some home buyers have learned the hard way, sometimes there is some major baggage attached to the titles of homes. Whether it’s due to liens on the property or divorce issues that were never properly settled, these problems are far from uncommon and lead to what is known as a clouded title.
Quitclaim deeds are the documents that release the holder of these problems from the title altogether and are issued when no money is used in the transaction. They’re regularly used within families to transfer names of properties.
Let’s say two people who are married are both named on the deed to their home. Then they get divorced and one spouse moves out and wants to be removed from the title. This spouse would file for a quitclaim deed, which transfers the property over from the couple to just the one person.
Alternately, when someone who owns a property gets married and wants to add their new spouse’s name to the deed, they would also file a quitclaim. Parents can transfer property to their kids through a quitclaim deed, too.
How Does A Quitclaim Deed Differ From A General Or Special Warranty Deed?
A warranty deed is the same kind of document as a quitclaim in principle. However, a general deed is what is used during the transfer of property through a sale and states that the grantor can transfer the property to you and serves as a record that there are no liens from any lenders or the IRS on your title.
A warranty deed provides guarantees that the property has good title and is free of liens. A quitclaim deed does not provide the same guarantee, but can be used to remove the clouds on titles.
How Do You Discover A Clouded Title?
If you are taking out a mortgage, your lender will require you to sign off on a title search on the property. That’s when a professional checks public records against the house to discover whether there are problems that were previously overlooked. You can do a title search yourself if you are paying in cash, but it is highly recommended that you use a professional who knows what to look for.
Does A Quitclaim Affect Your Mortgage?
A quitclaim deed does not affect the responsible parties of the mortgage at all, it only impacts the ownership of the property. Even if a married couple gets divorced and a quitclaim is filed to remove one spouse’s name from the property, but both spouses’ names are on the mortgage, then both spouses are still responsible for paying the mortgage.
What Is Needed To Issue A Quitclaim Deed?
Requirements for quitclaim deeds vary from state to state. However, most states require the same basic information including:
- The name of the grantor
- The name of the grantee
- Legal description of the property
- County name of the property
- Either the purchase price or proof of gift
- Signature of a notary public
- The signature of the grantor
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