Purchasing a Home from a Distance

Quitting Is Sometimes For Losers — What You Need To Know About Quitclaim Deeds

Posted by on Aug 19, 2015 in Uncategorized | Comments Off on Quitting Is Sometimes For Losers — What You Need To Know About Quitclaim Deeds

House hunting can be a very emotional ordeal. You could spend days searching for one that you both afford and also love. And then when you finally discover that hidden jewel, a home that fits most of your criteria and is priced below what you would expect for the neighborhood and its specs, you discover that the buyer only has a quitclaim deed or that the property’s ownership is somehow otherwise attached to a quitclaim deed. But you’re not sure what a quitclaim deed is or how it could affect the sale and potential ownership of a property. So what should you do?  What is a Quitclaim Deed? Quitclaim deeds are typically used to transfer the ownership of a piece of property to someone else without it being sold. So, for example, take the case of a husband and wife who are divorcing, and the wife no longer has any interest in owning a property because the balance of its mortgage loan is more than the fair market value of the house. Although she no longer wants to be associated with the property, the husband wants to continue living in it until the property’s value, hopefully, rises once again. In this situation, she can quitclaim her interest in the house to her husband and, hopefully, be free of the responsibility of owning that house. Why hopefully? Because if her husband decides he can no longer pay for the property, she would still be held responsible for the loan obligation. Quitclaims only affect the title of a property, not the financial obligations tied to them.  The Problems With Quitclaim Deeds The main problem with quitclaim deeds is that anyone can create one for any property, if they choose to do so. For example, a person could quitclaim the Empire State Building to a friend, and that person may think they now own a piece of this iconic property, but in reality he owns nothing. A quitclaim, according to the Times Herald, is not a promise or a warranty that the seller actually owns that property. In addition, if a quitclaim was not recorded properly with the country clerk or the equivalent, the purchase of the house could become messy and the actual ownership of the home could be at question. For example: A parent who has passed away had quitclaimed a property to a child who is now trying to sell the property, but the other children are disputing the quitclaim. If there is no will, and the quitclaim was never recorded, the other siblings may claim they have rights to ownership of the property.   The person owning the property has a quitclaim deed that was not recorded properly, and now it turns out the property is not actually in their name.  You may not be able to get title insurance. If you purchase a property with only a quitclaim deed, you will probably not be able to get title insurance, which protects you against any encumbrances, liens or title defects that may be associated with the property.  Hire a Real Estate Attorney Because there can be problems with purchasing a property that involves a quitclaim deed, it would be in your best interest to hire a real estate attorney who is well versed in these types of deeds and understands...

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