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.