Daily Archives: October 8, 2018

Broker presenting the contract to clients

Buying Real Estate: Understanding the Quitclaim Deed

Broker presenting the contract to clientsA deed is required when transferring real estate property, and one common kind of deed is called the quitclaim deed. But a quitclaim deed isn’t appropriate for all situations since it doesn’t provide sufficient security for buyers. It is, however, practical in certain situations like when transferring real estate between trusted family members.

What Exactly is a Quitclaim Deed?

To better understand how a quitclaim deed works, you need to learn how a general warranty deed works. The general warranty deed is that’s usually for certifying a title’s clean state, meaning that it guarantees that the individual who’s transferring the title to you is indeed the property’s owner and is legally entitled to transfer it to you. With this kind of deed, no one except the grantor or seller could claim ownership of the property. This deed likewise guarantees that the property has no liens or debts and provides you warranty or protection against these things.

On the other hand, you get no such warranties with a quitclaim deed since all a quitclaim deed does is transfer any of the grantor or seller’s interest in the property to you. It doesn’t guarantee that there are other owners who could claim the property as theirs. You also won’t be protected against liens or debts on the property. Do note though that a quitclaim deed doesn’t affect mortgage payments since it would only transfer the title of the property so if the property is still under a mortgage, the seller would still be liable for the payments, explains a mortgage broker from VIP Mortgage in Phoenix.

Main Takeaways

A quitclaim deed is basically a way for transferring property from the owner or grantor to another individual, usually a buyer. When a grantor issues the deed to a buyer, there’s no guarantee that the buyer would be protected against issues with the title of the property such as liens or debts.

It’s best that you only accept a quitclaim deed from family members or someone you really trust. Also, quitclaim deeds could be useful for correcting title errors or changing names indicated in the title without involving money.