Using a quit claim deed is ideal when a party desires to transfer part or all of a piece of real estate between trusted parties, who generally know each other well or are related. Under these circumstances, the protections and processes used for other types of deeds are often unnecessary.
Instead, a more simple, less costly approach to transferring title is generally preferred. There is no need for the protections of a warranty deed, and is little need for legal or title advice from real estate lawyers, title companies, escrow companies, and the like.
A quitclaim deed is generally used to transfer title from owners into a trust from whatever form of title vesting was held previously, e.g., joint tenancy, individual ownership, community property, etc. The same parties retain control, but they now control the trust, which controls the property, rather than controlling the property directly.
bviously, there is no need for warranties or protections against ones self, so using a quitclaim deed is ideal. Quitclaim deeds are also useful to add a spouse to property title due to a marriage or to remove a spouse from title due to a divorce.
A quitclaim deed is a great way to convey partial or full ownership in real estate to a family member, maybe a child, parent, sibling, or more distant relative. A quitclaim deed is also useful for the executor of an estate to convey title to an heir or family member.
A quit claim deed can also be used for property sales between unrelated parties, but caution is encouraged.
When buying from an unknown party, it is generally wise to use a professional, e.g., a real estate lawyer, escrow company, or title company, to do an exhaustive title search, have the seller provide title insurance to the buyer, and utilize a grant or warranty deed for greater warranties.
With all that said, some are capable of doing the needed research on their own, and there are many creative ways to purchase real estate from someone you do not know, and a quitclaim deed could be useful. For instance, if buying from a distressed seller of property, a quitclaim deed may be useful in a number of circumstances.
A distressed seller may utilize a quit claim deed to transfer real estate to a buyer who wants to take over payments for the existing mortgage, allowing the seller to walk away and avoid foreclosure, and keeping some of their credit intact in the process. Another example could be an equity share investment, when an investor purchases part of a distressed property using a quit claim deed to save the owner from foreclosure, and hopefully providing the buyer a good investment in part of a property.
While there are exceptions, some of which are described above, quitclaim deeds should generally be used for easy, cheap, and quick title transfers between known and trusted parties.
Attention! We are not attorneys and we are not lawyers. We cannot represent customers, select legal forms, or give advice on rights or laws. The article provided is for information ONLY and is NOT a substitute for the advice of a lawyer.