What’s The Difference Between a Quitclaim Deed and a Warranty Deed?

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A few weeks ago I wrote a post on real estate titles and deeds.  I wanted to follow up on that post with a bit more detail on a couple of widely used deed types.  I know, this can seem like this is simple stuff, but in reality it can be a bit complex.  It can be especially complex to the newbies out there who are perhaps hearing these terms for the first time.

First, let’s look again at exactly what a deed is.  A deed is a conveyance of real estate.  It is signed by a grantor (typically a seller) and is the instrument that commonly transfers the title to real estate from one person to another.  A deed is how one “sells” real estate.

There are two common types of deeds that are used between what are often referred to as “normal” buyers and sellers.  Those two types are warranty deeds and quitclaim deeds.  While both of these documents are deeds, what they convey and how they convey it are quite different and every real estate investor should understand that difference.

There are of course other types of deeds such as tax deeds, special warranty deeds, etc.  But these are usually used in special situations between “non-normal buyers” such as when a bank forecloses on a property.  I will cover those in another post.

Warranty Deed

A warranty deed is a deed in which the grantor warrants that they have a good, clear and marketable title.  You can think of this type of deed just as you would with any other product in which you get a warranty.  The maker or seller of the product provides you with a warranty that their product will work.  If the product does not, they will somehow fix the problem.  The situation is very similar for a warranty deed.  The seller believes the title is good and clear.  They believe that they own the title and can transfer it to you.

Warranty deeds are perhaps the best deeds a seller can receive and it is what I demand from a seller before I purchase any property.  However, warranty deed or no, I always suggest a buyer get a good and thorough title search done prior to purchase just to be safe.

Quitclaim Deed

A quitclaim deed is a type of deed that simply conveys any and all interest in a particular property.  It is different from a warranty deed in that it does not warrant anything, it just transfers.  These deeds can be quite legitimate but have also been abused.  If you see a quit claim deed on a chain of title, it should raise your eyebrows a bit and extra caution should be used.  Remember, the seller using this deed is not warranting anything. They are merely transferring any and all interest in a property.

Quitclaim deeds are fine for many situations, such as when a husband and wife are transferring their interest into an estate planning tool like a revocable trust.  But they can be used as an avenue for fraud.  For example, I can quitclaim to any of you any and all interest I have in the Empire State Building.  Do you now own the Empire State Building?  No. You own only my interest, and guess how much interest I had.  Caution is needed therefore because people have used quitclaim deeds to lure unsuspecting buyers into paying for properties that the “seller” does not own.  I even understand that in some parts of the country, many recorded quitclaim deeds are suspect.

Just be careful when your see or are offered a quitclaim deed.  Many falsely think that warranty and quitclaim deeds are of equal value.  They are not.  A warranty deed is the way to go.

Ever had a bad experience with a quitclaim deed?  Share it in the comments.
Photo Credit: jety

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About Author

Kevin Perk is co-founder of Kevron Properties, LLC with his wife Terron and has been involved in real estate investing for 10 years. Kevin invests in and manages rental properties in Memphis, TN and is a past president and vice-president of the local REIA group, the Memphis Investors Group.

20 Comments

  1. Important point, thanks!

    From my research…

    A quitclaim deed contains no promises or warranties. The grantor simply
    gives up whatever claim he may or may not have.

    A quitclaim deed is commonly used in cases where a warranty of title is not an issue, such as to transfer an interest between spouses or to clear up a title defect.

    If a person is vested with an estate in fee simple, a quitclaim deed will transfer the
    property the same as a warranty deed.

    However, the grantor makes no guarantee that title is good.

  2. Hello,
    Question about how to convert a quit claim deed on a property to clear title.
    When I bought a lot ( no house), only lot, I was provided with a quit claim deed from the LLC. I looked up on the county website and the current owner is the LLC that gave me the quit claim deed. So I think the QCD is legit. However to make sure, I would like to convert it to my own LLC as ownership of the property. How do I go about it?

    Thanks.

    • Kevin Perk

      Naveen,

      A warranty deed would likely be nest, but a quitclaim deed may work just as well. Plus, if you are in Tennessee, there may be less transfer tax with a quitclaim deed.

      It will vary by state and jurisdiction. Check with a competent real estate attorney in your area for the best advice here.

      Thanks for reading and commenting. Sorry I can’t help more,

      Kevin

  3. I have never really gotten the big uproar over the deed type.
    Here in MA you pretty much ONLY see Quitclaim deeds. At least was has been my experience.
    After reading this I did wonder if I was just getting hosed though. :)

    Professor Google did confirm that they are by far the most widely used type here. However it did also lead me to WHY people don’t worry about them as much here. Basically the state legislature amps them up a little bit so they are more like the equivalent of a Special Warranty Deed in other places:
    “The grantor, for himself, his heirs, executors, administrators and successors, covenants with the grantee, his heirs, successors and assigns, that the granted premises are free from all encumbrances made by the grantor, and that he will, and his heirs, executors, administrators and successors shall, warrant and defend the same to the grantee and his heirs, successors and assigns forever against the lawful claims and demands of all persons claiming by, through or under the grantor, but against none other”.

    Thanks for making me think about this basic but important topic.

    • Kevin Perk

      Shaun,

      Thank you for sharing how it works in your locale.

      One thing I really try to emphasize is that rules can really differ from place to place. What might be normal in one area is frowned upon in another. Your example really demonstrates that. So thanks again for sharing. Local knowledge is very important in this business.

      I also appreciate your kind words. Glad I got you thinking :)

      Kevin

      • Yeah I guess that is actually the main reason I never thought much of it.
        If my attorney says it is good and we can get a clean Title Insurance policy on it that is really what I would be most concerned about.

        Does a Warranty Deed change anything with Title Insurance? Regardless of what kind of deed I had if a title problem arose I would be talking to my insurance provider to take care of it. I can’t see trying to find the former owner to tell them to take care of it if someone claiming to be an heir to an estate that was 4 previous owners ago and shows up and says they were never properly notified.
        Is it more for the title insurance companies to have someone else to go after to be made whole when made to pay a claim?

        • Kevin Perk

          Shaun,

          I think it would depend on the circumstances, the title company and the attorney who is explaining the situation to the title company.

          I know my attorney sees quit claim deeds as a sort of red flag that need a bit of extra probing as to why they were used as opposed to a warranty deed. That said, I have used quitclaim deeds to help clear up a title so I cold get title insurance.

          I suppose it is all going to depend on the particulars of each unique situation. Every deal presents something new. :)

          Thanks again for reading and your comments,

          Kevin

      • Kevin Perk

        Sharon,

        I agree that the title search is very important, perhaps the most important thing you can do before purchasing a property. Thanks for writing to reiterate that point. I just wanted to point out that there are differences between deed types and that one may be a bit more suspect than the other depending on the circumstances. Both however should be investigated by a title search as a good title search should uncover any issues.

        Thanks again for reading and commenting,

        Kevin

  4. Sara Cunningham on

    Good information. We have used Quitclaim deeds several times in Oklahoma. Most of them were used to change the ownership names on our SFR’s from our names to our LLC. The other instance was when we took over our sons house when he moved. Both times it worked great for us.

    • Kevin Perk

      Sara,

      All legitimate reasons to use them. I have also used them to help clear up a title and make a deal work. It all depends on the situation.

      Thanks for reading and commenting,

      Kevin

  5. This question is asked so often – thank you for addressing it! I particularly like how you pointed out in your comments how much things can vary in different parts of the country. I encourage everyone to seek local advice and read your own state laws before acting. My local title company and Secretary of State office are both great resources. This applies to deeds, LLCs, lease agreements, property management laws, etc. Your state may have very different requirements than the person posting on the forums, so make sure you are in accordance with where you live.

    • Kevin Perk

      Jonna,

      Great advice!

      People need to realize that laws and traditions can change from city to city and county to county. What is done in your city can change with just a few miles drive in any direction. Know your local laws.

      Thanks for reading and commenting,

      Kevin

  6. I once saved a young man who was a recruiter for the military. He bought a house for he and his wife, they divorced, the house became an after thought as he was assigned 3,000 miles away and the house went to foreclosure. Something the military severely frowns upon.

    I went to a real estate lawyer, he told me to use a Quit Claim Deed. Always listen to your real estate guru, there are reasons why they they teach what they do; the guru taught to use the Warranty Deed.
    To secure the house either one will do but the problem came with getting the house insured. It took about 6 months all because the Quit Claim Deed was a red flag to the insurance company. “Why would someone you don’t know Quit Claim Deed their house to you?”

    For insurance reasons only use a Quit Claim to family members.

    • Kevin Perk

      Robert,

      I don’t know if I would always do what a guru tells you, but I would certainly listen. :)

      Thanks for sharing your story and adding to the discussion. I do appreciate it,

      Kevin

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