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The process of buying a home is full of legal terminology and logistical hurdles to navigate, many of which are unfamiliar to new homeowners. But even if you’re a seasoned homebuyer, you still may need a full explanation of quitclaim deeds. This is because the quitclaim deed is only necessary under very specific circumstances — specifically, the transfer of real estate into someone else’s name without purchase or sale.

While you may be initially unfamiliar with a quitclaim deed, this document provides a relatively straightforward way to transfer property ownership, and it could save you time and money depending on your specific situation.

What is a quitclaim deed?

A quitclaim is a legal document that allows you to transfer the title of a property from one individual to another, without amending or adding to the deed. The individuals involved in this agreement are called the grantor and the grantee — in other words, the person who initially holds the deed for a property and the person who receives it, respectively.

While quitclaim deeds make it easy to quickly transfer a property’s ownership from grantor to grantee, there are some drawbacks associated with this approach. Since the property deed is transferred as is, there are no additional legal protections established for the grantee. This means that the grantee will be liable for any mortgages or liens that may exist against the property.

When are quitclaim deeds used?

Since the grantee may be vulnerable in this type of property transaction, they’re not often used outside of close relationships or family dynamics. Here are some examples of when you might choose to make use of a quitclaim deed:

• Marriage and divorce: In the event that property was purchased by an individual before marriage, a quitclaim form might be used to add their new spouse to the home’s title. It is also commonly used to remove one spouse from the title after a divorce.
• Wills: If a family member, business partner, or friend leaves property to someone in their will, a quitclaim deed might be used to transfer that property to the grantee after the grantor’s death.
• Gift: If you or a loved one are transferring property as a gift, the quitclaim deed makes doing so as easy as possible.

These are some of the most common examples of when you’ll see them used in the context of transferring property. There are other instances in which the quitclaim deed can be useful, too. For example, in the event that you buy a home and there’s a small mistake on the title, such as a misspelled name, you’ll need to update it, and a quitclaim deed offers a quick and easy solution.

How to file a quitclaim deed

The first step in transferring property with a quitclaim deed is to procure the appropriate form. To do so, you can visit your county clerk or the recording office where the property is located, or you can consult with an attorney, who would be able to guide you through the whole process as well as supply the paperwork. You may also choose to download a template from the internet, although you’ll want to verify the effectiveness of this approach with an attorney.

Once you have the form, fill it out with the name and address of the grantor, as well as a description of the property being transferred, the date of transfer, and the name of the grantee. Once all the necessary information has been recorded, the document must be signed by both the grantor and grantee, notarized for legal legitimacy, and filed at the county clerk’s office.

Pros and cons of using a quitclaim deed

Depending on the specifics of your situation, the quitclaim deed could pose benefits and disadvantages for you to consider. Here are a few things to know before choosing to transfer property with a quitclaim deed.

Pros:

• It’s quick and easy: The process of filing a quitclaim deed is straightforward and relatively fast. While it’s always best to consult a lawyer before deeding property to someone — even a close friend or family member — the process doesn’t usually require much effort or energy.
• It’s a great option for internal property transfers: Whether you’re transferring property within a family or within a business, this route makes it easy to handle the legalities without too much external interference and without money changing hands unnecessarily. Learn more about selling a house to a family member.

Cons:

• Doesn’t require proof of ownership: This is the core reason this type of document isn’t used outside of trusted groups — because the form doesn’t require the grantor to provide proof they own the property through title insurance, it’s possible someone could use this form to grant others property that they don’t actually own. This, of course, would not be legally binding.
• The new owner may be vulnerable to unanticipated liability: This document transfers property ownership from one person to another — mortgages, tax liens, and all. It’s possible that a grantee could end up receiving more than they’d bargained for in the process.
• Not always enough for loan approval: Many commercial mortgage lenders will not approve loans for a property transferred through a quitclaim deed. They typically prefer a warranty deed, which gives more concrete assurance that the applicant owns the property.

Now that you can see the strengths and shortcomings of using a quitclaim deed, you should have a better sense of whether this is the route you want to take. If you have concerns about moving forward with a quitclaim deed, look into other options at your disposal. The warranty deed, for example, is an alternative commonly used in sale and purchase transactions, and it provides both the buyer and seller a greater level of protection throughout the process.

While there are potential concerns in using a quitclaim deed, there are benefits to it as well. When transferring property between trusted family, friends, and business partners, it’s a popular approach. Now that we’ve answered the question “what is a quitclaim deed?” and addressed the possible concerns you could face in choosing to use one, you’ll be able to confidently determine which path forward is right for you.