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How Do Quit Claim Deeds Work?

Quit claim deeds are used for quickly and easily transferring titles to real estate to a new owner. Often, quit claim deeds are used when the property is not being sold but is merely being transferred between friends or family members. The advantage of quit claim deeds is that they are quick and clean compared to warranty deeds.

Quit Claim Deeds vs. Warranty Deeds

Warranty deeds essentially promise to the buyer that the seller holds proper title and that no one will show up down the road making a claim on the buyer’s title. Therefore, with warranty deeds, a title search needs to be conducted to make sure that the seller is a valid owner and title insurance is also usually purchased. On the other hand, title searches and title insurance are often not used with quit claim deeds because the deeds make no warranties to the buyer as to the status of the title or as to the seller’s legal interest in the property.

Common Uses of Quit Claim Deeds

Quit claim deeds are used for many reasons, including:

  • removing a cloud on the title if it is unclear who has the rightful claim of ownership,
  • transferring the title between family members,
  • transferring your real estate to a business for extra protection,
  • adding or removing a spouse from the title,
  • securing your property in a trust, and
  • filing bankruptcy.

How Do I Fill in the Recording Information?

Ever wonder what all those numbers are at the top of deeds? This area contains information for recording purposes. You will see places to list the tax parcel/APN number, the escrow number, and the title order number. In case you do not know what these items are, a tax parcel number is also called a Property Identification Number (PIN) or an Assessor's Identification Number (AIN) and can be found on your property tax statement and often also on your county assessor’s website.

The escrow number is the number the escrow company uses to identify your real estate transaction. Naturally, there will be no escrow number if you are not using an escrow company. Lastly, a title order number is the number the title company uses to identify your title report, if you ordered one. If no title company is being used in your transaction, then simply leave this space blank.

How Do I Make It Legally Binding?

In most states, a quit claim deed is considered effective and executed once it has been both signed by the grantor(s) and also delivered and accepted by the grantee. Although recording is not always required, it is highly recommended that you do record as soon as possible, because it will protect you from potential adverse claims to your title by other parties. Every person listed in the deed should receive a copy of the deed and the original should be recorded.

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