What is a Quitclaim Deed?
What is a quitclaim deed and when might you use one? First, let’s look at what a deed is and does in general. A deed provides proof of ownership and transfers the title from one owner to another owner.
A Warranty Deed
The type of deed most people are familiar with is a typical warranty deed. A warranty deed is used in most traditional real estate transactions. While it transfers ownership, it also requires a title search to prove the property is free from liens, easements, encumbrances and claims from any other party. It also typically requires title insurance in case any issues with the title or deed are found. It ultimately serves as a statement that the property is clear and transferable to the new party (buyer).
A Quitclaim Deed
A quitclaim deed transfers property without requiring the sale of the property. No money changes hands, no title search is required and no title insurance is required. This type of deed is most often used to transfer real estate between family members. It is also commonly used to add or remove a spouse in cases of marriage or divorce. A quitclaim deed can also be used by parents to transfer property to their children, or by siblings to transfer property to each other. It’s important to note that a quitclaim deed only involves the name on the title or deed to the property, but does not impact the mortgage.
Another way a quitclaim deed can be used is if a claim is found during a title search for a warranty deed, the lender might ask the person who could potentially make a claim regarding a property to sign a quitclaim deed transferring any potential interest they might have in the property to the buyer.
A quitclaim deed streamlines the transfer of real estate where no money changes hands into a simpler, easier process. This is most helpful for adding a spouse to a property (or removing one, in the case of divorce) or transferring property among family members such as parents and children or siblings.