Navigating real estate deals can be complicated enough, but when a quitclaim deed comes into play, it can add another layer of complexity.
It’s essential to know how quitclaim deeds work and their implications on real estate transactions.
What is a quitclaim deed?
A quitclaim deed is a legal document transferring any interest in a property from one person (grantor) to another (grantee). The grantor is giving up all interest and rights they may have in the property without stating what those might be or confirming if they actually exist.
There are no warranties or guarantees about the deed or whether the grantor legally owns the property and has the right to transfer it. There also isn’t any assurance that there are no liens against the property.
Because a quitclaim deed has such potential risk, it is usually used between family members or in a divorce, where one spouse transfers their interest in the property to the other.
It can therefore become a problem for someone trying to sell or buy the property. The seller may not have a clear title to the property. There is potential for fraud as someone may use a quitclaim deed to falsely take ownership.
Furthermore, banks may be unwilling to offer a mortgage on a property transferred via a quitclaim deed. Potential buyers may need to find another source of financing.
If a property you are interested in has a quitclaim deed in its history it’s imperative that you work with someone who can thoroughly research the title to ensure you are safe to proceed.