Warranty Deeds Versus Quit Claim Deeds

What is a Deed?

A deed is a document that transfers ownership or conveys real estate from one party to another. A deed is different from a sales contract. A sales contract is a promise to convey property in exchange for money. A deed is not a promise to convey, it is the conveyance itself. A deed contains a legal description of the real estate being transferred. This may include the lot the property occupies in a platted subdivision. Deeds in rural areas might use meets-and-bounds descriptions of the boundaries, which identify where the property lines are in relation to landmarks.

The deed must identify who is handing over an interest in the property (the grantor) and who is accepting it (the grantee). Most counties require the deed to have the addresses of all the parties involved.

Two Types of Deeds

The legal document that transfers ownership of real estate can be a warranty deed or a quitclaim deed.

Most real estate sales transactions use a warranty deed, which states that the grantor (previous owner) is the owner of the property and has the right to transfer the property to the grantee (new owner) and that there are no liens against the property from a mortgage lender, the IRS or any creditor, and that the property can’t be claimed by anyone else. Title insurance provides the financial back-up to the warranty deed and requires a title search to verify that no other claims on the property are outstanding.

A quitclaim deed is a simpler and lower cost conveyance often used when a property transfers ownership without being sold. No money is involved in the transaction, no title search is done to verify ownership, and no title insurance is issued. The grantor essentially quits all claims to the property and transfers their property interest to the grantee.

When to Use a Quit Claim Deed

Quitclaim deeds are most often used to transfer property within a family. Common applications include an owner getting married and adding a spouse’s name to the title, or when a couple gets divorced and one spouse’s name is removed from the title. Quitclaim deeds can also be used when parents transfer property to their children, when siblings transfer property to each other, or when property is transferred to a living trust.

For a property that does not have a free and clear title, a title insurance may ask a person who may have a property interest to sign a quitclaim deed to make certain that this person doesn’t make a future claim of ownership.

A quitclaim deed impacts only the ownership of the real estate and the names on the deed, not the mortgage. For example, in the case of a divorce, if both spouses’ names are on the mortgage, they are still both responsible for the loan, even if a quitclaim deed has been filed.

Filing a Quitclaim Deed

Although the rules vary by jurisdiction,  it’s wise to have the deed signed by all parties in front of a notary public, and copied and recorded at the county clerk’s office. In general, the quitclaim deed needs to include the legal description of the real estate being transferred, the date of the transfer, and the names of the “grantor” and “grantee.”


Source: 1-2-Law: https://www.12law.com

Chat is available on business days from 8:00 a.m. to 8:00 p.m. CST. If you would like to speak with a counselor outside of these hours, please return to the home screen and press the call button. If you are experiencing a life-threatening emergency, please proceed to the nearest emergency room or call 911 immediately.