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Selling Property Acquired by Quitclaim Deed

Published: March 30, 2014

There's a world of difference between a quitclaim deed and a warranty or grant deed.

A quitclaim deed can be useful when you're transferring property to family members as a gift or in a divorce, but in other circumstances it can be problematic. The grantor gives up his or her claim to the property, but this doesn't mean you now have title; you may have received a pig in a poke.

It's all about title

With a quitclaim deed, there is no warranty (guarantee) that the giver is conveying title; there could be other claims on it. Whereas with a warranty or grant deed, the buyer has legal ownership of the property. A title insurance company has cleared the title and sold the buyer a title insurance policy, which will pay costs if there is a subsequent problem with the title.

So why accept a quitclaim deed? It's an inexpensive way to transfer property, and, while an owner of a property acquired by quitclaim deed can't sell it without a clear title, the property can be sold later after a warranty deed is obtained.

To sell via a warranty deed, you'll need to pay a title insurance company for a title search; this involves looking for potential legal issues such as liens or previous disputes.

You can then buy title insurance and, with legal title, transfer the property through a warranty deed. To be legal, this must be filed at a recorder's office in the area in which the property is located.

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