The primary reason to use a quit claim deed is when part or all of a property is being transferred between known and trusted parties, and a simpler, less expensive process for transferring title is desired. In these situations, there is no need for the additional protections of a warranty deed, and is less or no need for professional advice from title companies, real estate lawyers, or escrow companies.
A quit claim is commonly used to transfer title from individual owners into a trust, still controlled by those same owners. Quit claim deeds are also ideal to add a spouse to title due to marriage or remove a spouse from title due to divorce. Quit claim deeds are also great to transfer partial or full interest in real estate to a family member, perhaps a child, parent, or sibling. Quitclaim deeds are also ideal for the executor of an estate to transfer title to a family member.
Quitclaim deeds can also be used for real estate sales between unrelated parties, but caution is urged. It is generally prudent when buying from an unknown seller, to use professional real estate lawyers, escrow companies, and title companies to do a thorough title search, have the seller purchase title insurance, and receive a grant or warranty deed for greater protections. That said, some people are capable of doing this research themselves, and there are many creative ways to purchase a house from an unknown seller, where quit claim deeds can be useful. For example, when buying from a distressed sellerof real estate, there are a number of ways to invest in the property where a quitclaim deed could be useful. For example, a distressed seller might use a quit claim deed to convey the property to a buyer who wishes to take over payments on the existing mortgage, so the seller can walk away and avoid foreclosure, preserving some of his or her credit. Another example, might be an equity share investment, where an investor purchases a portion of a distressed property using a quit claim deed, saving the owner from foreclosure, and providing the buyer a good partial investment in real estate.
In general, quit claim deeds should be used primarily for easy, inexpensive, and simple title transfers between known and trusted parties.
A quit claim deed is very easy and inexpensive to use.
The first step is to get a quit claim form. Quitclaim forms are generally just one page. There are links all over this web site you can click to get a quit claim form. There are some free forms available on the web, but the better crafted, better formatted, and more credible ones generally should be purchased. It is a small price to pay to transfer a valuable property correctly. The good news is they are very inexpensive, a few dollars, and can be downloaded in real time.
A quitclaim form contains several elements contained within the appropriate legal language. The top paragraph contains information on the grantor and grantee, the location of the property, and the jurisdiction where it is to be transferred. The second paragraph generally provides information on how much consideration is provided in exchange for the real estate. When transferring between family members, this may be a nominal amount, perhaps $1.00. When a purchase is involved, it is likely to be a sizable amount. There must generally be some amount of consideration in a contract to make it valid. Keep in mind the county recording fees and county transfer taxes are generally calculated based on the consideration amount. The smaller the consideration is, the less you pay. This paragraph also generally contains how title will vest. Sole ownership, community property, joint tenancy, tenants in common, and the like are some examples of how title may vest. Below this paragraph, the quitclaim generally displays the legal description. This is not the common street address listed in the first paragraph. You can generally find the legal description on your deed from the prior purchase of the property, or the county assessor will give it to you at no charge by phone, in person, or over the web in some counties. The next paragraph generally contains some legal language about the rights being transferred. Last, there is a section for a witness, signature of the grantor, and signature of a notary. The grantee, or receiver of the property interest, generally does not need to sign the deed.
After obtaining the form, the next step is to of course fill out the quitclaim form. The sections needing information generally have underlined blank areas to signify where to enter the information. This can be done in handwriting or typed in on your computer. The property address, grantor and grantee, etc are easily filled out. More thought should be put into the amount of consideration, as discussed above, the way title should vest, also discussed above, and obtaining the correct legal description.
Once filled out, the quit claim form must be notarized and the grantor signature witnessed. This is a simple matter. Most banks have notaries available at all times at no charge or a small charge, so simply go to your bank to get your quitclaim deed form notarized. You may also have a notary at work. If your company has a legal department, it will nearly always have a notary. Mail box stores also generally have notaries for around $10 who will notarize your signed quit claim form.
Once your quitclaim form is filled out and notarized, it should be recorded at the county recorder’s office, for the county in which the property is located. This is also a simple matter. You can make a trip to the recorder’s office and record it yourself. It requires no expertise. You will have to fill out a small form, and hand it to a clerk for recording. There will be a small recording fee, and in some counties, transfer taxes. These amounts are generally determined based on the amount of consideration listed on your quit claim deed. You do not have to record your deed to own the property, but it is in your best interest, because until your quitclaim is recorded, it is not in the official records, and if you lose your paper quitclaim deed, evidence of your title will disappear with it if not recorded. Also, by recording, you prevent someone else from recording an interest prior to you. Quitclaim deeds can also berecorded electronically. You can pay a small amount to virtually any title company to record the deed for you electronically. Some real estate lawyers also can file electronically for you. In some counties, you can also mail in your deed and fees for recording, then get the stamped recorded deed mailed back to you.
You may wish to use a professional real estate attorney or title company to help you decide how to hold title, determine the appropriate amount of consideration, and get your legal description if you do not feel comfortable, but it is not difficult to research and make these determinations yourself, at no cost.