Important Things to Know About Quitclaim Deeds, Winston Rowe and Associates
If you're dealing with a quitclaim deeds you should exercise caution, as they're the weakest type of deed in real estate.
By: Winston Rowe and Associates
One of the most complicated components of being a real estate investor is knowing your way around deeds. Deeds can be private or official, although in homeownership almost all deeds are private. Within the category of private deeds there are warranty deeds and quitclaim deeds.
Quitclaim deeds, also called non-warranty deeds, only convey the interest of the grantor of the current property. In other words, they only "remise, release, and quitclaim," their interest, meaning there are no promises regarding the quality of the title.
Quitclaims can be useful, but only for extremely low-risk transactions between people who know and trust each other.
Additionally, quitclaim participants often don't involve the exchange of money with each other because of the nature of the deed. As such, quitclaims are usually used to transfer property within a family, such as between a parent and adult child, ro between siblings. Some divorcing couples also use a quitclaim deeds to expediate the process.
Sometimes, there are "defects" in the recorded history of a real estate title. These can include things like issues with wording, a missing signature, or the failure to properly record certain documentation in past exchanges.
Quitclaim deeds are often used between family members because there is no exchange of money and both members are, often, well aware of the title that the deed grants. Due to this fact, quitclaims are often not used in situations where the property has a mortgage outstanding.
There are exceptions to this general rule, however, but the important thing to keep in mind is that the use of a quitclaim deed will not affect the price of the mortgage. The grantee often assumes the responsibility for paying the mortgage or refinancing it with the permission of the lenders in play. If the grantor wants extra protection, a legally enforceable agreement can be drawn to document the terms of payment.
Winston Rowe and Associates prepared this article they are a national consulting firm that specializes in working with commercial real estate investors. The can be contacted at https://www.winstonrowe.com
Winston Rowe and Associates