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Difference between Quitclaim Deed and Warranty Deed
During the purchase or sale of property, we always need to ensure that the paperwork is spotless. This includes being aware of the type of deed a property has and using the appropriate variety of deeds to transfer your ownership to a new owner.
Two types of deeds are well known in Real estate − quitclaim deed and warranty deed. Even though their differences can be challenging to understand, you must do so before transferring property ownership because they impact how rights will be determined in the future.
What is Quitclaim Deed?
Quitclaim deeds are where the ownership of the respective property is usually transferred to one of the family members or a business/trust.
For instance, Quitclaim Deeds are frequently used to distribute the property as part of a divorce settlement, transfer real estate through a Will or as a gift, or transfer property into a trust. This kind of deed transfers legal ownership to the respective person they want.
A quitclaim deed allows a person to add or remove a person's name in the title, to pass on the possession of the property to a family member, or while giving a business associate interest in the property.
Quitclaim deeds have no guarantee. A property can be purchased and later found out that it was not legally eligible for sale at all, and its ownership would belong to someone other than the person who bought it. This proves a considerable setback when people purchase property without finding additional information.
There is no validity that the person selling the property could own it as there is no such “warrantee.” Quitclaim deeds seem to favor the seller more than the buyer.
A quitclaim deed has limitations; however, it is still a document that can be used effectively if the grantor has the legal right to the property in question and there are no liens or other issues to be aware of. In safer circumstances, where there is little doubt regarding the ownership interest in a property, quitclaim deeds are used.
What is Warranty Deed?
A warranty deed is an explicit guarantee that proves the complete possession of a property. This kind of deed is employed in more complicated real estate circumstances involving monetary exchanges between unaffiliated buyers and sellers, such as when obtaining a mortgage to purchase a home.
A person with a warranty deed can prove their complete ownership and have full rights to transfer the possession of the property to another person. A warranty deed's grantor may be held liable if they fail to uphold the promise of ownership in the asset that enabled the transfer. The warranty deed offers more assurance and less room for conflict because the seller assures their right.
Differences between Quitclaim Deed and Warranty Deed
Despite having the same overall objective, both deeds are very different and produce different results. Therefore, we must comprehend the distinctions between the two acts before making meaningful choices. The following table lists the differences between both types of deeds.
| Factors | Quitclaim Deed | Warranty Deed |
|---|---|---|
| Usage | Frequently used when deeds are transferred among relatives and friends. | They are frequently used among business professionals. |
| Shift of ownership | All that is transferred is the interest of the grantor. | Includes both the grantor and grantee interest in the deed transfer. |
| Safeguards for the grantee | Provides no security for the grantee | Provides complete security for the grantee |
| Purchase of property | Not safer for the purchase of the property. | Safer when purchasing the property. |
| Lawful activity | If there are issues with the deed transfer, the grantee is powerless to pursue immediate action or file charges. | The grantee has legal rights and may file a lawsuit against the grantor if any irregularities arise. |
Conclusion
Both quitclaim deeds and warranty deeds have their advantages and disadvantages. Knowing when to use a quitclaim deed and a warranty deed is essential. Quitclaim deeds are used for quick transfer of ownership between families, while warranty deeds can be used in the professional league during the sale or purchase of a property.
A warranty deed is more advantageous to you if you are the buyer because it offers more robust legal protection. A quitclaim deed is more beneficial to you if you are the seller. This is because it provides the buyer with the least protection and is the easiest way to transfer the title to a property. You must choose the type of protection you want and the action that best protects you because every situation is unique.
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