Naturally, when you decide to sell your home, you want to keep the costs as low as possible. What’s the point of making all that extra cash if you’re going to spend a large portion of it on overhead and professional fees? Some homeowners choose to go it alone, avoiding the use of a realtor and title business. A seller’s dream is quitclaim deeds. For this type of property transfer, most states provide simple fill-in-the-blanks forms, and entering the information takes very little time. All you have to do now is make sure you understand and obey your state’s procedures and rules.
A quit-claim deed is a deed that transfers ownership of property immediately. In an afternoon, a willing seller can draft, sign, notarize, and record a quitclaim. It’s a handy method for removing title ambiguity when it’s unclear if someone has a residual interest in the property. It is often used by cash housebuyers.
Features of the deed
A quit-claim deed, also known as a non-warranty deed, transfers the grantor’s current interest in the property if any. The grantor just relinquishes, releases, and quitclaims the grantee’s interest in the property. There are no guarantees or warranties made about the title’s quality.
The good news is that you can still sell the house normally, even if it isn’t an appealing option for many buyers. The title will still be in your possession. The title and name on the deed are affected by the quitclaim deed, but the name on the mortgage is unaffected. That implies, if the mortgage hasn’t already been moved into your name, you may still need to have it done before you try to sell the house.
Advantage of the transaction
It’s a handy method for removing title ambiguity when it’s unclear if someone has a residual interest in the property. It’s also important in circumstances where the grantee needs to prevent the grantor from claiming the property again. A quit-claim deed, on the other hand, is a legal document that transfers your stake.
Before acquiring a home, buyers usually undertake a title search. Encumbrances, liens, and other blots on the seller’s title are revealed through title searches. Some buyers, as well as most mortgage lenders, require that the buyer acquire title insurance, which protects the buyer and his lender against loss caused by a title defect.
If the grantor has a good title when the deed is delivered, a quitclaim deed can convey the title as efficiently as a warranty deed. The lack of any warranties, on the other hand, makes a quitclaim deed less appealing to a grantee. Under the deed, the grantee has no legal remedy against the grantor if the title has a flaw. Last but not least, because you received the house as a gift, you’ll need to figure out what the house is worth to you — the tax basis of the house — before you sell it. Whatever your seller’s tax basis was, that will be your tax basis. When it comes to transferring title from one person to another, a quit-claim deed is just as good as any other deed. The only true difference between the two deeds is that in a quitclaim deed, the former owner transfers all of his or her ownership and interest in the land.