The Quit Claim Deed and How to Use It

How To Use A Quit Claim Deed

The Quit Claim deed is the most common deed. It is literally a deed to quit any claim you have on real property. The deed does not guarantee you have interest in the property only that you are abandoning any interest you may have to the persons receiving the deed. It is mistakenly called a Quick Claim deed or quitclaim deed.

Purpose of the Quit Claim Deed

A quitclaim deed does transfer any ownership held by the seller to the buyer, but does this without guarantees. If a seller issues this deed on property they don’t own, they are not liable in any way. They are not guaranteeing they own anything, they are just transferring any interest they may own to the buyer.

When Are They Used

This type of deed was not meant to be used in standard real estate transactions. It was designed to be used for very specific purposes. These include:

Transferring property between family members.
Adding additional owners to your property.
Transferring your land to a Family Trust or Company.
Donating property.
Clearing up title problems.
Changing the vesting of your property.
Correcting errors in previous deeds.

The above uses do not include the transfer of money. When property is sold a Warranty Deed should be used.

How They Affect Real Estate Buyers

A buyer should never accept this deed in a real property transaction. It provides no guarantees that you now own the property. If the seller owned the property or a portion of the property it does transfer their ownership however, if you later find title problems you have no recourse against the seller.

How They Affect Real Estate Sellers

Using this deed is helpful to sellers. When transferring property they are not making any guarantees to the buyer. If there are title problems a seller may want to use a quit claim deed to transfer real estate. This should be a red flag to any buyer of possible title problems.

This type of deed is not appropriate for real estate transactions. It should only be used for purposes listed above or similar that do involve the transfer of money.

The Warranty Deed. The Warranty Deed is the most secure deed and should be used in all real estate transactions. This deed guarantees title to the buyer.

The Special Warranty Deed. The Special Warranty Deed is a compromise deed. It guarantees title only for the time the seller owned the real estate.

February 26, 2016

The Special Warranty Deed

The Special Warranty Deed

The Special Warranty Deed is a compromise deed. It guarantees clear title only during the time the real property was owned by the seller. It does not guarantee against any issues that may be present before the seller owned the property.

It is between a Quit Claim Deed and a Warranty Deed in guarantees. The Quit Claim Deed has no guarantees, while the Warranty Deed Guarantees the property is free and clear from the original owner until the time of sell.

General Purpose and Effects of the Special Warranty Deed

This deed transfers all of the owners interest to the buyer and guarantees against title problems from the time the owner purchased the property until the time of sell. It does not guarantee against problems that may have existed when the owner purchased the property.

When Are They Used

Government agencies and large companies often have a policy to issue this deed. Other sellers will also want to use one if they know of previous title problems. Attorney’s often advise their clients to use this deed.

How They Affect Real Estate Buyers

This deed transfer the sellers interest to the buyer and is usually a good transfer. However, if there are title problems before the seller owned the property the seller is not guaranteeing against these problems. The seller may not be aware of these problems.

How They Affect Real Estate Sellers

When using this deed the seller is accepting less legal liability that when using a Warranty Deed. This is definitely to the sellers advantage.

While there may not be previous title problems, the seller will not liable for any that do exist. If a seller insists on using this deed consider this a red flag of possible title problems. Also title companies may not insure the transaction unless a Warranty Deed is used.

February 26, 2016

The Warranty Deed

The Warranty Deed is the most secure deed and should be used in all real estate transactions. When signed the seller is guaranteeing there are no title problems on the land being sold.

General Purposes And Effects of the Warranty Deed

This warrants or guarantees the property from the original owner to the time of sale. The buyer receives this guarantee from the seller. Most real estate transactions are insured by title insurance so that becomes the main protection to the buyer. In this case the title insurance company has the right to go against the seller in the event of title problems.

When is this Deed Used

This deed is the standard in real estate transactions. If the seller wants to use a different Deed consider this a red flag of possible title problems. If you are buying, insist on a this Deed or do not complete the transaction. An exception to this might be government agencies and large corporations which have a policy of using Special Warranty Deeds.

How They Affect Real Estate Buyers

This deed gives the buyer the greatest amount of protection. The seller guarantees the property is free and clear of any title problems or liens, except those listed on the deed.

How They Affect Real Estate Sellers

When a seller signs this deed they are guaranteeing there are no title problems, loans or liens on the property, except those spelled out in the deed. This includes title problems the seller is not aware of. If a title company insures the property they have the right to come against the seller to resolve title problems that existed before the time of sell.