Sometimes transferring real estate ownership requires you to have a deed to ensure that the entire transactions are official. A deed enables you to officially transfer the property’s title from one individual to another. A quitclaim deed is faster and riskier. However, it is usually accomplished between two trustworthy people.
This Deed is mostly used in transactions that do not need payment. Bear in mind that Quitclaim is also called a non-warranty Deed. If you are not familiar with the Quitclaim deed, worry no more. Kindly read on to familiarize yourself with the Quitclaim.
What Is a Quitclaim Deed?
A quitclaim deed is a legitimate document that transfers ownership rights from a single grantor to a grantee. It features a legal property description and the name of the grantee and grantor. Furthermore, they are usually filled with the country recorder’s office to become part of the public record.
What is a Quitclaim Deed Form?
A quitclaim deed form is a fillable or editable document used to transfer property ownership to another individual. It is quick, unlike other transferring methods.
Quitclaim Deed Form Templates & Examples
When to Use a Quitclaim Deed?
You must be wondering when is the appropriate time to use a quitclaim deed. Worry less about this because there are a few scenarios where the Quitclaim is considered a suitable option. These scenarios include:
- Fixing blunders in the titles- You can use a quitclaim deed if you have a blunder in your property title and need it fixed.
- Gifts- Suppose you have gifted your beloved one your property, and you need an uncostly title transfer.
- Wills- If a person dies and have granted a relative or even friend a title
- Divorce- On the other hand, you can use a quitclaim deed if you are divorced and require a title transferred to your ex-spouse or you.
- Marriage- When married, you can easily add your spouse to your entire titles
If you are keen, you will notice that every transfer involves two major trusting parties from the scenarios mentioned above. This means there are low chances of risking a bad title deed.
How Does a Quitclaim Deed Work?
To transfer ownership property faster between two trustworthy parties, you must use a quitclaim deed. First, you need to fill out a quitclaim deed form, which entails the name of the grantee and grantor, when you require the property to be transferred, property description, among other basic information related to the transaction. Bear in mind that all parties usually sign this form. Besides, to legitimize this document, you require a notary. Your document will be filed at the local county clerk’s office when you are through.
Similarly, you must know that not even a single time will a quitclaim deed directly impact your mortgage. A mortgage is a document of its own that a guarantor must continue being responsible for even after guaranteeing property to another person. They can only stop being responsible after paying off their mortgage or legitimately transfer a mortgage directly to the grantee. Quitclaim deeds usually vary because they depend on the local laws of a State.
How to Write (Fill Out) a Quitclaim Deed?
Here is an overview of several steps that will guide you in filling out or writing a quitclaim deed:
Under your document’s header, write the person’s name who initiated the document. After that, write the individual to whom the Deed will be returned, especially after filling. This document is usually returned to the grantee or new owner in most cases.
Fill in the country and the State where the property is situated under the document’s body. Ensure you indicate the price and suppose it was gifted; then, it must be set at $ 1. Likewise, the grantors must be entered alongside the marital status and the mailing address. This should be followed up by the name of the grantor or grantors, mailing address, and marital status.
After that, enter the legal description of the property according to most State Laws, incorporate Lot and map number as detailed by the Town or Country assessor’s office accompanied by page numbers and Deed Book generated by the office of Recorder’s. Remember, additional details might be needed to process the Deed accurately.
When you are through with the steps mentioned above, you move to the final step, which features the signature page. The person preparing this document must enter the grantor’s mailing address and name in this section. The form must be signed under the notary public or even two witnesses. It must be entered in a format that is typed. This means after printing. The witnesses only need to sign.
How to File a Quitclaim Deed?
When you file a quitclaim deed, you would have transferred ownership to your grantee. To achieve this request properly, you must consider a few things, such as the purchase price, sufficient premises description, and a correctly signed form depending on your State’s laws. When the local Recorder’s office completes the entire process, your form will be more than ready for filling. Below are a few steps that will guide you file a quitclaim deed:
Step 1: Negotiating with the property owner
Ownership interest usually involves parties agreeing on a certain price tag. In many cases, a quitclaim deed is usually used when someone wants to buy part of real estate interest. Thus, you might not require a real estate agent or a negotiating person.
Step 2: Collect the needed details
To enable most cities and country process your Deed, you must provide the following information:
- Consideration: The purchase cost in dollars
- Grantor’s information; This includes the seller’s mailing address and name
- Grantee’s information: The purchaser’s mailing address and full name
- Where to send the mail after the recording: It refers to where the Deed should be sent. To the attorney or grantee after being filed.
- Preparer’s by: This refers to the person writing the form
- Legal description: It is found in the page numbers and deed book at the City recorder’s office or County
Step 3: Authorization of the form
Form authorization must be executed as per state signing requirements. This usually entails a notary public or even two witnesses. The grantee and the grantor must show up before the party witnesses.
Step 4: Recording or filling the Deed
Here, you need to record your Deed. In the United States, each jurisdiction features a recording office depending on the State. Ensure you carry with you a blank check since there will be charges for filling, which your recording office sets.
Pros of Quitclaim Deeds
Many grantees and grantors find quitclaim deeds interesting because of several primary reasons.
- Legally binding- As much as a quitclaim deed looks simple, it is a legitimate document, which helps to provide ownership proof in the title search.
- Ideal for internal transfers- It makes it simple to transfer interest in the property, especially among the family members or even people, to a living trust.
- Simplicity- Multiple quitclaim deeds are straightforward and short. You can find the quitclaim deeds legal real estate website. Therefore, ensure that you seek professional legal advice before you deed any of your given property to someone.
Cons of Quitclaim Deeds
Below are a few disadvantages of quitclaim deeds:
- Commercial lenders consider it inadequate- Mortgage lenders emphasize warranty deeds, unlike quitclaim deeds, more so when backing up real estate loans. Lenders usually need sufficient property ownership assurance, provided by a warranty deed.
- It has no guarantee to a new owner- A quitclaim deed does not guarantee that the property does not feature title defects, like title claims from the third parties and tax liens. This makes it not ideal for use when selling your property, especially for cash considerations.
- Lacks proof of ownership- The quitclaim deed grantor provides no title insurance to sign the Deed. This makes it possible for another individual to utilize the deeds to give out a property that they have no ownership of.
Quitclaim Deeds and Divorce
Suppose you are married and own real property jointly. And you happen to divorce. You are likely to agree that one of you will own the property and get sole ownership. On the other hand, you will have to negotiate some financial buyout. In most cases, a single spouse transfers almost a halt of the ownership to the other.
After agreeing on who should retain the ownership of the property, the Quitclaim deed will assist you in changing this joint ownership easily into a sole ownership property. Remember, a spouse who gets sole ownership can mortgage or sell the property without requiring approval from the other spouse. Additionally, sole ownership allows the spouse to put their property in their final will.
Tax Implications of a Quitclaim Deed
The grantee is responsible for paying the property taxes after the grantor finishes transferring property ownership. Furthermore, the tax bill will always be mailed to the address stated on the Deed. You must know that many States enforce the real estate transfer tax on property transfers.
Bear in mind that the transfer tax is a minimal percentage of the purchase cost or price. Fortunately, multiple States offer you numerous exceptions from your transfer tax. This applies mostly to transfers between guardians or parents and children. Quitclaim deed transfer also incurs other taxes like inheritance, gift, or income tax. Ensure you consult a certified public accountant or a tax lawyer concerning tax implications.
Quitclaim Deeds VS. General and Special Warranty Deeds
A quitclaim deed has no title warranties. Furthermore, fine points usually addressed by general deeds and unique warranty deeds are never applicable to quitclaim deeds scenarios. This makes Quitclaim a difficult instrument to transfer title. Remember, quitclaim functions to transfer legitimate interest in your property. Besides, a quitclaim offered by an individual not owning the property in the Deed is not liable to any damages at the law. They both have no breached covenants since they are no covenants initiated.
Facts About Quitclaim Deeds
Below are a few facts concerning quitclaim deeds:
It impacts ownership and the deed name and not the mortgage
The quitclaim deed will not cover property cases involving an outstanding mortgage. Moreover, it will be challenging for multiple grantors to pay off a mortgage with no proceeds from the property sale. A grantor can use a quitclaim deed even if he has a mortgage because it does not affect the mortgage at any cost. The grantor will remain liable to the mortgage even after the ownership.
Similarly, the scenario can be quite complex if the mortgage incorporates a due-on-sale clause. Especially if the loan becomes due immediately, the title is transferred. Suppose the grantor quitclaims the property. The grantor will feature no recourse if the guarantee sells the property to a third party or stops paying. Therefore, ensure that you draw a legally enforceable agreement to showcase the payment terms.
They are efficient to transfer titles if the titles are legal
Quitclaim deeds are efficient like warranty deeds, but only if the grantor has an outstanding title during the delivery of the Deed. Without warranties, the quitclaim deed becomes less attractive from the perspective of the guarantee. For instance, if the title features a defect, the grantee incorporates no illegal recourse against his grantor as indicated in the Deed. In most cases, a quitclaim deed is utilized if the grantor is unfamiliar with the title status.
They are used to sort out title defect
Quitclaim deeds are utilized to eliminate past real estate title history defects. Besides, title defects include problems with wordings, missing signatures, and inappropriate recording of real estate documents. If the grantee’s name is misspelled on the warranty deed placed in the public record, then you can use a quitclaim deed with the proper spelling to ensure that the warrant deed features the correct title.
You must accept quitclaim deed from the grantors you trust and know
A quitclaim deed has no warranty concerning the grantor’s title quality. And it is excellent for low-risk transactions between two trustworthy people and does not involve the exchange of cash. Remember that quitclaims deeds are utilized in transferring property within the family, such as between siblings. Married partners can also use it to add their partners in the title. Divorced couples can also use a quitclaim deed.
They are used when purchasing a minimal amount of protection of the Deed
You must know that the quitclaim deed usually showcases the grantor’s interest in the property. Most people refer to this Deed as a non-warranty Deed. Remember, there are no promises or warranties concerning the title quality. This is clarified on the Deed. If the grantor shows no interest in the property under the quitclaim deed, then the grantee gets nothing and may not get a warranty right against the grantor.
They are varying types of warranty deeds; they include:
· Special warranty deed
· General warranty deed
Quitclaim deeds are usually permanent, and you can never cancel them. After filing and notarizing the Deed, revoking it becomes impossible unless the court decides that you initiated it under unjustifiable influence from another party.
Yes, quitclaim deeds can be used when the grantor incorporates a mortgage. However, the grantor is usually liable to the mortgage ever after the entire process of transferring ownership through a quitclaim deed execution.
A quitclaim deed does not impact your credit, especially if you signed over a condo using a quitclaim deed.
Yes, you can refinance for the mortgage reminder, especially if you did not settle the whole amount when purchasing the property. Suppose you do not qualify. You have no option but to sell the property. This is likely to happen if the mortgage company does not allow you to transfer your original mortgage to your name.
In a grant deed warranty, a seller transfers the property using a marketable title. Besides, this title is usually clear and free from other claims, while a quitclaim deed does not feature any given guarantee against the future ownership encumbrances.
Based on this detailed post, you are now familiar with a quitclaim deed., how it functions, and under what circumstances you should use it. A Quitclaim deed is usually between two individuals who have built a good relationship and are trustworthy. Ensure you use it anytime you transfer your property ownership.