Don’t Quit Your Claim! A Quitclaim Deed Is Not a Mortgage Saving or Estate Planning Tool

Image of an old run down house with a cloudy background. Captioned: Don't Quit Your Claim! A quitclaim deed is not a mortgage saving or estate planning tool.

A quitclaim deed conveys—”quits”—a person’s interest in a property to someone else. Quitclaims prove useful in certain transfers of properties among family members or between divorcing spouses. The quitclaim allows separating partners to follow a court’s direction and leave one party as sole owner of the marital home. Quitclaims might seem convenient in other circumstances, but they are rarely the best choice. 

In contrast to the warranty deed, a quitclaim deed offers no assurances of clear title. In most jurisdictions a recorder of deeds must simply record a quitclaim deed; it is not the recorder’s role to investigate the circumstances of the conveyance.

Scammers may take advantage of the quitclaim’s simplicity to siphon equity from vulnerable people. After recording a quitclaim, a bad actor may sell the property with no guarantees, rent it under false pretenses, or exploit its underlying value as collateral.

Spot the Mortgage Relief Scam

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Adding Your Spouse to the Deed

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You’ve just gotten married, and already own a house in your own name. You want to share everything with your spouse, including your real estate, so adding their name to the title is part of being married, correct? Well … maybe. Much depends on the terms of your mortgage, and whether your spouse has serious credit issues. Before adding your spouse to the deed, speak with your attorney.

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Removing Someone from a Real Estate Deed

Image of two people at a desk with real estate deed discussing removing one of them from the deed.

Removing someone from a deed—is it possible? The short answer: No.

Misconceptions and Realities

It is a misconception that someone can be “removed” from the deed.

Nor can a co-owner simply take away another party’s interest in a property by executing a new deed without that other party.

In short, no one can be passively removed from a title.

Even if an owner “added” someone else to the real estate deed previously, the first owner cannot reconsider and take the second person off the deed.

Why?

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The Quitclaim Deed and Fraudulent Real Estate Transactions

Image of a safe fashioned in the shape of a house with hand reaching to open- article discussing quitclaim deeds and their role in fraudulent real estate transactions.

Quitclaim deeds show up commonly in fraudulent real estate transactions. This type of deed fraud can impact elderly people, buyers purchasing real estate from strangers without warranty, renters who are paying someone who is not a legitimate owner, and anyone involved who might buy, sell, or own property.

Here, we examine how it happens and how to detect it.

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The Quitclaim Deed’s Function in a Contract for Deed Sale

A contract for deed sale can present a convenient alternative to the traditional real estate conveyance. In this owner-financed deal, the buyer usually lives on the property upon the execution of the contract. While enjoying the property, the buyer pays for it in monthly installments, until the agreed-upon price has been paid in full.

Down the road, when full payment is complete, the purchaser formally acquires the title deed. This event occurs through a warranty deed, which guarantees that the seller is the sole party with any claim on the property to be conveyed – no exceptions, unless stated on the deed.

If things don’t go as planned, and the buyer defaults, recovery of the property can be a time-consuming process. Defaults happen, so a seller should consider having the buyer sign a quitclaim deed as part of the execution of the contract. A quitclaim is a non-warranty deed. It conveys property with no warranty for the title. Through this document, if it becomes needed, the buyer will relinquish any claim on the property. 

Here, we look at how the contract for deed sale works, and briefly examine the function of the quitclaim deed.

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