Are you interested in selling a home with a quitclaim deed? Even without the added challenge of a quitclaim deed, you likely already know that selling a house can be an overwhelming task.
In this article, we’ll explore the necessary details for selling a house with a quitclaim deed and help you navigate the various issues you might encounter. Hopefully, you’ll feel more empowered to take on your home sale and its many challenges.
From the basics of quitclaim deeds to transferring property ownership, we’ve compiled all the information you need to sell your house so you can navigate the complexities of this process every step of the way.
Selling a Home With a Quitclaim Deed
If you want to sell a house fast in New York with a quitclaim deed, you need to understand all the intricacies of how to transfer title ownership and what the process means for you.
When you sell a home with a quitclaim deed, you are transferring your house without any warranties about the title. A quitclaim deed is a type of deed that transfers ownership of the property from one person to another.
It’s used when there is no “guarantee” or “warranty” of title on the property (but it differs from a warranty deed). In that context, the house could have a good title or a bad title. The owner gives up all ownership interest in the real property to the new owner.
The most important thing to know upfront about a quitclaim deed is that it does not provide any guarantee or warranty of the property’s title. The property owner, or grantor, transfers their interest in the property to someone else, known as the grantee. The home could have a clear title or have a bit more baggage for the new owner.
Things To Know About Quitclaim Deed
As noted above, a quitclaim deed is used to transfer home ownership without having to resolve any outstanding issues, like mortgages and liens. If you plan on selling a house with a quitclaim deed, you need to know what goes into a quitclaim deed.
If you’re going to use quitclaim deed transfers, you’ll want to make sure you completely understand that it offers limited or no warranty. The grantor, or the seller, makes the simple decision to transfer their interest to someone else, the buyer. That means that the buyer will assume all the risks associated with the property. In that context, prospective buyers must understand the potential challenges associated with this process.
No Title or Insurance
If there are any issues with the title, the quitclaim deed does nothing to address them. Luckily, in most situations, the buyer will be well aware of this fact (as well as any title defects or insurance issues) upfront. For the seller, this could be beneficial as any issues they faced in the past will be passed on, hopefully in good faith, to another party.
Buyers may want to consider getting title insurance during this process as well.
When it comes to quitclaim deeds, the financial obligations, or lack thereof, are limited. The person taking ownership of the house is immediately on the line for any liens or mortgages the home comes with.
Again, from the seller’s perspective, this can be incredibly advantageous, but for a buyer unaware of the liens or mortgages, it can come as an unwelcome surprise. But, in the majority of cases, this isn’t going to be an issue, as quitclaim deeds are usually used to transfer property between family members without any encumbrances.
Consult a Legal Professional
As with many of life’s major decisions, you could benefit from consulting a legal professional. An attorney well-versed in ownership rights and real estate transactions can ensure that you’ve carefully considered any issues with the property deed or help you discover any missing information, issues, or concerns that a buyer might have.
They will also give you general legal advice, inform you of your legal rights, and get you the appropriate quitclaim deed form.
One of the more important things to note is that a quitclaim deed will not remove any liens you have on the house. If you, the owner, have previous debts or claims against the property, these will remain once you take over ownership of the property.
Individual State Laws
Lastly, you’ll want to consider the laws in your state (something else your real estate attorney can help you with). The regulations among quitclaim deeds vary from state to state, so do your research to confirm you’re up to date with your state’s regulations. That can be as simple as checking with real estate agents in the area.
Why Use a Quitclaim Deed?
While on the surface it might seem like a bad idea for any buyer or seller to use a quitclaim deed, there are a few specific scenarios where they might be helpful.
The most common situation in which a quitclaim deed is used is when a property is transferred from one family member to another or between close friends. It’s easy to imagine a parent who wants to transfer the ownership of a house to their child, both of whom are well aware of the remaining mortgage or any liens. After all, there is a certain level of trust between the two parties that wouldn’t exist under normal house-selling circumstances.
There might also be a situation where this kind of deed is used to clear up any issues with a title. By using this deed, the owner is releasing any claim to the property and, in a way, clearing the title. This often happens when there are potential issues with the ownership history.
A further situation in which this kind of deed is used for homeowners is when an ex-spouse wants to remove or add their name from a poetry title (such as during a divorce). In these situations, the parties involved are likely more interested in speed than the title.
Lastly, you might use this kind of deed when all parties are okay with assuming the risk that comes with the transfer. For example, among business partners or investors. That works because the parties usually have plenty of knowledge about the property already. Plus, it’s always good to remember that an all cash offer is better.
How To Use a Quitclaim Deed When Selling a House
There are a few steps to using a quitclaim deed when selling a house that you need to know before starting the process. They are:
- Discuss the details of the sale with the intended buyer. This might be a family member, friend, business partner, or colleague with whom you have an established level of trust. This person should be well aware of any issues the property has before proceeding.
- Prepare the deed and all related documents. Next, ensure you have all the necessary documents for the sale and the state you live in. One of the best ways to make this step go smoothly is to consult with an attorney to help you ensure that everything is as it should be and you haven’t missed out on a legal document. The basic information you need will include the seller, buyer, a description of the property, and any other terms or conditions you decide on.
- Get all the necessary signatures. As you likely already know, you’ll need to get all the necessary signatures to finish the deal. This will include your signature as the seller and the buyer’s (or grantee’s) signature.
- Record the sale. Once you finish these other steps, you’ll have to get the deed notarized by a notary public and recorded with your local government office. This makes it clear who owns the home.
- Finalize the sale after resolving any other outstanding, miscellaneous issues. The closing process usually involves transferring funds and the bill of sale.
For any of these steps, it’s recommended to have an attorney present to make sure that you’re doing everything correctly (including all sometimes complex legal requirements).
Selling a home with a quitclaim deed is not something that’s going to work for everyone. But, in a few specific situations, such as transferring ownership between family members or friends (or changing the names on a title), it works well.
When considering using a quitclaim deed, keep in mind its limitations and benefits. It does not offer the same protections a conventional house sale would, meaning you must do your research to ensure it’s right for you.
Even then, you might be unsure about your next steps. Working with a cash buyer might be the solution. At Leave the Key, we buy houses Brooklyn people know will be taken off their hands stress-free.
So, if you’re looking to sell a house fast in New York, our team is ready to walk you through the entire process. We recognize the advantages of selling a house by owner terms only, so we’ll work hard to get you the value you deserve.