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Quitclaim Deeds: Definition and Uses Explained

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Published on November 22, 2023
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If you want to transfer property ownership to another individual, there are a few different options you can consider. A quitclaim deed is a fast and cost-effective way to transfer a property title. It’s often used after a divorce or as an estate planning tool for families.

However, quitclaim deeds come with risks, so it’s important to understand how they work first.

What Is A Quitclaim Deed And How Does It Work?

A quitclaim deed is a type of deed that transfers property to another person without performing a traditional sale. A grantor and grantee are the two participants involved in a real estate transaction. The grantor gives up, or quits, their claim to a property and transfers ownership to the grantee. That’s why this process is also sometimes referred to as a quick claim deed.

A quitclaim deed is performed without a title search or title insurance, so there are very few buyer protections.

When Can You Use A Quitclaim Deed?

A quitclaim deed is typically used to either transfer property or to remove someone from a property title. Here are two common scenarios when a quitclaim deed may be used: 

  • Transferring property to a family member: Quitclaim deeds are often used as an estate planning tool in families. For example, if your aging parents want to transfer their property to you, they might use a quitclaim deed. Or if the property is held in a family trust, a quitclaim deed can be used to transfer the property to its future owner.
  • Removing a spouse after divorce: If a married couple gets divorced, the grantor would likely be the one removed from the title. They would essentially be granting their portion of the ownership interest to their ex-spouse who is the grantee (receiving the ownership interest). However, refinancing is the only way to remove your ex-spouse from the mortgage.

The Difference Between Quitclaim Deeds and Warranty Deeds

A quitclaim deed and a warranty deed are both legal documents used in real estate transactions to transfer property ownership from the grantor to the grantee. But a warranty deed promises that the grantor holds a clear title and has the right to transfer it to the grantee.

However, a quitclaim deed doesn’t make any promises about the state of the title — it simply transfers ownership of real property. A warranty deed is more favorable to the grantee, while a quitclaim deed is more favorable to the grantor.

A quitclaim deed is a good choice if you’re being gifted property from a family member or someone you trust. But if you’re buying property, you’ll want to opt for a warranty deed since it gives you more liability protections.

How Can Using A Quitclaim Deed Affect Your Mortgage?

A quitclaim deed doesn’t directly affect your mortgage since these are two separate documents. You’ll continue to be responsible for your mortgage even after transferring ownership with a quitclaim deed.

Some properties have a due-on-sale clause, which is a provision in the mortgage contract requiring full payment on the sale or conveyance of the property. In this case, a quitclaim deed can cause problems if the grantee refuses to pay the mortgage in full or sells the property to someone else.

If you want to transfer property ownership and your mortgage to someone else, you have a few options. You can talk to your mortgage lender and ask for approval for the grantee to take over the mortgage. The grantee also has the option to refinance.

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Quitclaim Deed FAQs

Here’s some additional information about how quitclaim deeds work.

When does a quitclaim deed take effect?

Once the quitclaim deed is signed by the grantor and accepted by the grantee, it’s considered legal and effective. However, some counties in the U.S. require that the grantee sign as well.

What are the repercussions of a quitclaim deed?

The biggest downside of a quitclaim deed is that it doesn’t guarantee a free and clear title. It also doesn’t guarantee that the grantor has the right to transfer ownership of the property. This could lead to serious legal and financial repercussions. And in some states, transferring property ownership can trigger mandatory tax payments, even if you were gifted the property.

Do I need a lawyer to file a quitclaim deed?

No, you don’t need a lawyer to file a quitclaim deed. But it’s in your best interest to speak to an experienced real estate attorney about whether a quitclaim deed is the right choice for your situation. Even if you decide to move forward with the property transfer, an attorney can help you understand the potential legal and tax implications.

The Bottom Line

A quitclaim deed is an effective way to transfer property, remove a former spouse from the title or remove a title defect. Quitclaim deeds are often used as an estate planning tool for families.

But while a quitclaim deed is a good way to transfer property ownership, it won’t remove the grantor from the mortgage. If you want to make changes to your mortgage, it’s best to start the process online.

Jamie Johnson

Jamie Johnson is a Kansas City-based freelance writer who writes about a variety of personal finance topics, including loans, building credit, and paying down debt. She currently writes for clients like the U.S. Chamber of Commerce, Business Insider, and Bankrate.