Unless you’ve had experience with one, the term ‘quitclaim deed’ may not be one you are fully familiar with.
According to Legalzoom.com, “a quitclaim deed conveys a seller’s interest in a property to a buyer. This means that a seller who owns a building or other property can give a quitclaim deed to a buyer—and thereby transfer the seller’s entire interest in that property to the buyer.”
Often, they are used between family and friends because there is a certain amount of trust required between the parties.
Many people who receive property through a quitclaim deed wonder if — and how — they can sell it afterward. While there’s absolutely nothing wrong with using a quitclaim deed to transfer property, there are a few considerations to take into account when selling the property later. We also suggest you speak with an attorney or legal professional to ensure you fully understand any potential risks before making any decisions.
Here’s a high-level view of what you need to know about selling a home with a quitclaim deed.
What is a Quitclaim Deed?
First, let’s define exactly what a quitclaim deed is and what it is used for.
A quitclaim deed transfers a seller’s right to property to another party without completing the traditional sale process. More often than not, the property is transferred without a formal sale or exchange of money.
This type of deed may be used to gift property to a relative or spouse while avoiding some of the paperwork that’s associated with general or special warranty deeds.
However according to Legalzoom.com, unlike these other types of deeds, a quitclaim deed does not include any protections for the buyer or recipient. Why? Because it doesn’t require the seller to prove that they actually have an interest in the property.
Thus, a quitclaim deed does not guarantee that either the seller or the buyer actually owns the property. It is still possible to purchase a home using a quitclaim deed, but most buyers choose not to forego their protection in the sale and opt for a traditional sale.
Quitclaim deeds don’t take other people’s claims on the property into account, such as liens or other encumbrances. In other words, this type of deed doesn’t offer any protection to the buyer as to the legal ownership status of the property.
You could purchase a home with this type of deed and later find out that the seller had no legal right to sell you the property. While this option clearly benefits the seller, some buyers find it less than ideal and prefer a more thorough, black-and-white agreement.
Selling a Home With a Quitclaim Deed
Given the lack of guarantees and protection offered by a quitclaim deed, it’s easy to see why not many buyers would agree to accept this type of deed. In most cases, a quitclaim deed is appropriate for situations when a property is transferred to:
- Family members
- A spouse or soon-to-be ex-spouse
- A trust
While quit claim sales are faster and involve less paperwork, they leave the buyer at risk. That means it may be difficult to convince most potential buyers to enter a deal that uses a quitclaim deed.
I Bought a Home With a Quitclaim. Can I Still Sell?
The good news is that, though it may not be an attractive option to many buyers, you can still sell the property normally. The title will still have been transferred to you.
The quitclaim deed affects ownership and the name on the deed, but it does not affect the name on the mortgage. That means you still may need to have the mortgage transferred into your name before you try to sell the house, if it hasn’t been already.
A quitclaim deed doesn’t offer the same protections or guarantees as a standard or warranty deed. That said, in most cases, it’s still a legal way to buy or sell a house… but it’s best used between people you trust, such as family or friends. An attorney or legal professional can help you determine if this option makes sense for you.
Because of the lack of protection, you may find it hard to persuade a buyer into accepting a quitclaim deed.
HomeGo provides homeowners with a hassle-free way to sell, quitclaim deed or not. Our agents have experience purchasing properties with this type of deed and can offer a fast, as-is sale.
Your sale can close in as little as seven days, and you won’t have to worry about making repairs, staging to sell, or paying real estate agent fees. Avoid the hassle of a quitclaim deed and sell to HomeGo!