Buying or selling your real estate comes with lots of legal paperwork. It takes an average of 49 days to close on a home, even after an offer is accepted.

What if you only want to transfer ownership between family members? Or add your spouse to a property title after you get married? Is a lengthy legal process still required?

A quitclaim deed can help you streamline the time and the work. Before using a quitclaim deed, however, it's important to understand how this deed works and compares with other types of deeds.

Read on for our definitive guide to property deeds and how to make a quitclaim deed work best for you.

WHAT ARE PROPERTY DEEDS?

Property deeds are proof of ownership, similar to a car title. The property deed proves you own "real property."

Real property is the term referring to a certain land area and anything included with that land, such as buildings. It also encompasses your bundle of rights to the property, which include:

1. Possession rights (legal ownership and occupation)
2. Enjoyment rights (lawful enjoyment of property)
3. Control rights (lawful usage of property)
4. Exclusion rights (lawful prohibition of property access)
5. Disposal rights (legal transfer of ownership)

The bundle of rights is not absolute and subject to local, state, and federal laws. For example, you cannot use your property in a way that violates local zoning ordinances or interferes with any public property like power lines, sewage systems, and sidewalks.

1. Property Deed vs Property Title

Property deed and property title are two terms used interchangeably. But property deeds are the actual physical document(s) of the property, while a property title is the abstract concept of ownership that refers to your bundle of rights.

When real estate is sold, the property title is transferred to the new buyer, known as the grantee. The seller is referred to as the grantor.

The property deed must be written out in some form of record and contains legally significant information about the real property. This includes:

• Property description (boundaries, improvements, etc.)
• The grantor and grantee's information
• Applicable clauses
• Legally bound signatures

The seller and buyer use the property deed to "clear" a property title. Clearing a title means eliminating any issues that can affect its transfer, such as ownership disputes or liens.

2. Types of Property Deeds

Not every property deed is the same. There are six main types of deeds:

1. General warranty deed
2. Special warranty deed
3. Bargain and sale deed
4. Mortgage deed
5. Deed of Trust
6. Quitclaim deed

The deed type depends on the method of transfer and the level of protection (warranty) it offers. For example, a warranty deed protects the grantee against title issues. A deed of trust transfers the title between two entities for a beneficiary.

There are certain situations where one type of deed may be more useful than another. A quitclaim deed can be especially helpful for a property transfer between family members.

WHAT IS A QUITCLAIM DEED?

A quitclaim deed is a title transfer where the grantor "quits" their claim on the property and transfers their controlling interest to the grantee. There are no warranties for the grantee, who may or may not actually inherit anything.

Quitclaim deeds are legal in all 50 states, with different state laws managing their execution. The only exception is Texas, where state property codes and quitclaim deeds are a trickier issue and therefore much less common.

How Does a Quitclaim Deed Compare to Other Deeds?

A general warranty deed offers the most legal protections through covenants or legally binding agreements. These covenants include:

• Seisin (seller is the rightful owner)
• Right to convey (seller can legally transfer the title)
• Against encumbrances (the property has no legal issues)
• Quiet enjoyment (a third party cannot disrupt ownership)
• Warranty (grantor will defend grantee from third party claims)
• Further assurance (grantor will continue to protect grantee's claim)

These covenants legally protect the grantee. However, if the grantor passes away or has legal issues such as bankruptcy, the warranty may become void. For this reason, many grantees also use title insurance.

Other deeds offer similar clauses and provisions but are more limited. For example, special warranty deeds only protect the grantee against title issues relevant to the grantor's ownership history.

A quitclaim deed offers no legal covenants, warranties, or clauses. It is also referred to as a non-warranty deed, because it offers the least amount of protection compared to other deeds.

WHY USE A QUITCLAIM DEED?

If quitclaim deeds are riskier, why use them at all? Quitclaim deeds are especially useful in situations where time and effort may be an issue, but trust between the two parties is not. This generally includes relationships between family members, spouses, and children.

1. Marriage and Divorce

A quitclaim deed allows you quickly and easily add your spouse to a property title or transfer it to their name. It also allows you or your ex-spouse to remove the controlling interest in jointly owned real estate during a divorce.

A quitclaim deed does not affect a mortgage, however. Even if someone is added or removed through a quitclaim claim deed, whoever signed onto the mortgage is still legally obligated to pay it

2. Inheritance, Gifts, and Trusts

If you want to transfer ownership to family members as part of an inheritance or a gift, you can use a quitclaim deed. You can also use a quitclaim deed to add real estate into a trust.

3. Property Title Errors

Typos or errors can commonly arise in property titles. A quitclaim deed can correct any errors without going through any unnecessarily lengthy or complicated legal work.

THE BEST PROTECTION FOR YOU AND YOUR REAL ESTATE

Whether you're buying or selling a home or commercial real estate, it's important to protect yourself during a property transfer. A quitclaim deed is useful for quick and easy situations but has the least amount of legal protection.

If you're worried about warranties, we can help. We offer comprehensive services for buyers and sellers, including title insurance and title searches. Contact us today to learn more!