How Does a Quitclaim Deed Work?
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A quitclaim deed is sometimes used in a real estate transaction. It is a legal document that an individual signs with the intention to "quit any claim" to a piece of property. In essence, the person signing the document is transferring their interest in a piece of property or real estate, to someone else.
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The one signing away their rights is known as the grantor; and the one receiving the rights to the property is called the grantee. An example would be two people that own a home together and decide to separate. The one leaving the home may sign a quitclaim deed. This legal document grants the one that remains in the home full rights to the property, and removes any interest the party leaving may have in the home.
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Another example may be business owners who decide to separate. Several parties may own a portion of the building the business is housed in. If one person leaves the company, or business, that person may quitclaim their interest in the property to the other owner or owner's.
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This legal document only transfers the interest of the person signing the document. Anyone else that has an interest in the property still holds their interest, unless they too sign the quitclaim deed.
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Family members may be heirs to a piece of real estate. Each member holds an equal share of interest in the property. If one family member does not wish to have any interest in the property, they may sign their share or owned portion over to the remaining family members.
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Those using quitclaim deeds should be aware that this document in no way insures that no one else holds any interest in the property. It is just a quick way for one individual to give up their personal interest in the property.
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Quitclaim deeds are simple to execute. It is generally a one-page document declaring that the grantor is giving up all rights of interest in the property, and transferring them to the grantee. All individuals involved must sign this document in front of a notary.
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Quitclaim deeds are often referred to as "quick" claim deeds, because they are in fact, very quick and efficient, unlike a warranty deed, that requires title searches. This quick and simple procedure is well-used in situations that allow for family transfers or for business transfers of property. It is not so widely used in a general real estate transaction though.
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Warranty deeds, though more time-consuming and costly, are a better choice for purchasing a home from an individual that is not a family member or acquaintance. Warranty deeds guarantee that the entire property rights are being transferred from one party to another. A quitclaim deed offers no such guarantee.
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