Though you probably didn’t use a quitclaim deed when you bought or sold your home, there are situations when quitclaim deeds are the best way to transfer property.
Here, we will answer many of your questions about quitclaim deeds, such as:
What a quitclaim deed transfer is
When a quitclaim deed is the best choice
How to transfer a title through a quitclaim deed
How a quitclaim deed differs from a warranty deed
How to respond to a challenged quitclaim deed transfer
What Is a Quitclaim Deed Transfer?
Quitclaim deeds are a fast way to transfer title to your property. There’s no need for title searches, title insurance, or real estate closings. Once the deed is prepared, signed, and delivered to the grantee (buyer), the grantor (seller) of the property has effectively transferred their interest to the grantee. We use grantor and grantee instead of seller and buyer because sometimes the property transfers as a gift.
The reason it’s so easy to transfer title with a quitclaim deed is because the grantor is only transferring their interest in the property. They aren’t making any claims about that interest.
When To Use a Quitclaim Deed
Quitclaim deeds offer the least protection for buyers, so it’s best to use quitclaim transfer only with people you trust. Quitclaim deeds are most often used to cure defects in the title of property or for transfers within a family.
An example of curing a title defect might be a case of a mistake, such as a misspelled name on the original deed that transferred the title. A quitclaim deed can cure the defect in the original title transfer.
Transferring Title With a Deed
With a quitclaim deed, the grantor is only transferring title to their interest in the property. There are no warranties made to the title as with a warranty deed transfer.
Warranty Deed Versus Quitclaim Deed
Warranty deeds are the most common way people transfer real estate. With warranty deeds, the grantor is guaranteeing that they own the property free and clear of title defects and that they have the authority to sell the property. That differs from a quitclaim deed where the grantor is transferring the title as is.
The extra protection for buyers with warranty deeds is the reason for title searches and title insurance.
Do You Need a Quitclaim Deed?
A quitclaim deed can save money on real estate transfers since you eliminate the need for real estate closings, title searches, and title insurance. With estate planning issues among family members and curing title defects, a quitclaim deed transfer is the way to go.
Quitclaim Deed Process
Next, let’s go over what the quitclaim deed process is like.
Step 1: Contact Your Attorney. They’ll be able to give you the quitclaim deed form that you’ll need to fill out. When filling it out, you’ll need to have your assessor’s parcel number (APN) on hand. You can find it on your valuation notice, tax bill, or deed. You’ll also need to include your legal property description which can be found on your deed.
Step 2: Grantor signs the deed and delivers it to the grantee. Most states require that you sign any deed in front of a notary public in order for it to be an official, valid document. The notary will seal and sign the deed which certifies that the property will be changing owners.
Step 3: Recording with the register of deeds office. Once you’ve obtained your notary seal, you’ll be able to finalize the process. By taking it to your country recorder’s office, your transaction will be made public record. This establishes an official paper trail and record of the sale which is an important part in verifying the history of a given property or purchase.
Taxes when Drafting a Quitclaim Deed
As stated by the Tennessee Department of Revenue, the tax base for a “true” quit claim deed is the consideration given. The tax is due on the fair market value of the property when the language in the document shows intent to convey the property itself, or gives warranty, rather than a mere chance of title. The language involved in this includes “to have and to old” or “in fee simple.”. For most Quitclaims, since property is being gifted, there is either a $0 or $10 consideration value and no transfer taxes are owed.
Choose Rochford Law for Your Quitclaim Deed Transfer
At Rochford Law & Real Estate Title, we’re here to help you with your real estate and title services needs. For additional information about quitclaim deeds, pleasecontact us at (615) 269-7676. We look forward to hearing from you.