Shopping for a new home is both exhilarating and exhausting. Finding the right home in the right location at the right price can be an elusive trifecta.
It almost seems like a dream when you finally find the house you want to buy. And is it really a big deal if the house has a quitclaim deed?
What is a quitclaim deed?
A quitclaim deed is used to transfer an interest in a piece of real estate from one person to another. However, the deed does not provide guarantees about the property’s title.
So, why and when are quitclaim deeds used? There are actually several situations that make use of these types of deeds:
- Transferring property among relatives, such as parents to children or between siblings
- To add or remove a spouse from a title
- If an issue comes up during a title search, a quitclaim deed allows someone to give up any rights they might have
- The property owners want to place their real estate into a trust
- Fixing typos on property records
A new home buyer would be wise to be wary of a property with a quitclaim deed. The biggest issue is that there is no assurance that the seller holds a clear title to the property. At some future date, someone else could come forward with a legal claim, leaving the home buyer without a home.
Additionally, a quit claim deed doesn’t provide the guarantee that legal attachments in the form of unpaid taxes, mortgages or contractor debts have been cleared. The new home buyer may also obtain additional financial obligations along with the property.
If you’re buying a new home, you need someone who will work in your best interests and protect your investment. They will ensure that a proper title search is completed and that there are no liens, disputes or claims on the property. They are the ones who will identify any red flags and ensure that all the paperwork is valid.
Purchasing a new home is already a stressful situation. You don’t want the additional complications that can accompany a quitclaim deed.