The concern is that if a quit claim deed is obtained, that the new owner will somehow have “less than full ownership.” This is not true.
A quit claim deed, like the other deed types, transfers any and all interest in the subject property, from the person signing the deed (the grantor) to the person receiving the deed (grantee).
The Quit Claim Deed
While all deeds transfer any valid interest from the grantor to the grantee, a quit claim deed comes with no warranty of any kind. The grantor is giving the grantee any interest he may have. However the grantor is NOT saying:
-That he necessarily owns ALL the interest in the property (there may be additional owners so you’re only getting a partial interest)
-That there are no liens and encumbrances against the property
-That the grantor actually even owns ANY of the property.
You’re simply getting whatever the grantor’s interest is, if any, without any guarantees. A quitclaim deed is fine if you’ve determined on your own that the seller does indeed own the entire property (or that you have all sellers present who need to sign), and that the property is free of liens.
Special Warranty Deed
This is often given by corporations and other entities, especially after getting a property back from a foreclosure. The corporation warrants that it has compete interest in the property and that there are no existing liens DURING THE TIME THEY OWNED IT ONLY.
They do not guarantee the property in any way for the time before they purchased it. However, the title company will investigate title to its satisfaction and will not insure it unless it is clean.
This is most often given in typical real estate transactions between two owners who are getting title insurance, and probably a mortgage on the property in the case of the buyer.
The seller warrants the property against liens and incomplete ownership since the beginning of time. However, the seller’s financial ability to make this warranty isn’t typically an issue because of the title insurance being given.
Why Quit Claim Deeds are Best For DeedGrabbing
We get a quit claim deed when we give the seller a token payment to take over their unwanted property prior to the tax sale. Why? It’s unreasonable for an owner to warrant the property for ANY amount with such a low payment.
Many times the seller will even tell us about potential liens, so it would make no sense to give a warranty that there are no liens.
We need to satisfy ourselves that we’re getting the entire interest in the property, and that there are no liens, or the liens are known and acceptable. At this point, a quit claim deed is all that’s necessary for us to take over.