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January 11, 2010 11:48 AM   Subscribe

Anyone know much about Quit Claim Deeds?

I bought a piece of property in the Ozarks several years back and it came with a Warranty Deed, which I understand to be the preferred deed to get when buying land.

I'm considering another property, but this one comes with a Quit Claim Deed. Any dangers here? I understand that it's no guarantee to the buyer. Is it possible that the owner may not even own the property and therefore has no right to sell it? Is it possible that someone else may come after you and say they're the ones that actually own the property?

Or is it considered perfectly legit and I'll likely encounter no problems.
posted by VC Drake to Home & Garden (34 answers total) 3 users marked this as a favorite
From the wiki...

"A quitclaim deed is a term used to describe a document by which a person (the "grantor") disclaims any interest the grantor may have in a piece of real property and passes that claim to another person (the grantee). A quitclaim deed neither warrants nor professes that the grantor's claim is valid.

sounds like a bit of a gamble to me...
posted by HuronBob at 11:54 AM on January 11, 2010

Dude, talk to a real estate lawyer. Seriously.
posted by iknowizbirfmark at 11:54 AM on January 11, 2010 [1 favorite]

IANAL, IANYL, and so on and so forth. I'm also in New York State, but have done real estate work for about 13 years now.

The only time I've ever seen Quit Claim Deeds used is when a property is being transferred between family members (a husband to himself and his wife, or vice versa, or a parent to a child). I've never seen a Quit Claim Deed used in a transfer from one party to a completely unrelated party.

According to the Wikipedia entry, quit claim deed are also used if a property is being auctioned off to pay back real estate taxes. Is this the case?
posted by Lucinda at 11:57 AM on January 11, 2010

Is it possible that the owner may not even own the property and therefore has no right to sell it?

sure. that's also true of a warranty deed. the difference is in your remedies against the seller -- a quitclaim gives you very limited remedies against your seller.

there is nothing illegitimate about the use of a quitclaim per se, but it may suggest that there are claims against the property that you'll want to know about. hence the advice to see an attorney.
posted by lex mercatoria at 12:04 PM on January 11, 2010

Is there a way to find out about any possible claims against the property on my own?
posted by VC Drake at 12:09 PM on January 11, 2010

Financing such a purchase will also be a challenge. You need to discuss this with a lawyer. You can get the basics from the internets or even from a real estate broker (but they are trying to sell you something and legally represent the seller not you) but that is not enough information to go forward with such a transaction. It might be enough to dissuade you though.
posted by caddis at 12:09 PM on January 11, 2010

Also, is there another type of deed other than these two?
posted by VC Drake at 12:10 PM on January 11, 2010

You can do a title search in the office of public records. The clerks will show you how. Even better would be to hire a title insurance company to do the search.
posted by caddis at 12:10 PM on January 11, 2010

I'm not a lawyer type of person, so there's no need to reference lawyers anymore. It seems to me that people with lawyers must be people that have some pretty good money, and that's not me. It also seems to be a relationship that in order to work to its greatest end would need to be built up over the years.

And I've heard plenty of stories from people who didn't have long-established relationships with a lawyer and just consulted one for a one-time deal and didn't get anything out of them at all. So consulting a lawyer is not necessarily the answer. And, likely, anything they can do when it comes to research is something an individual can do if they just know where to look.

This is just a casual discussion. I thought that maybe there might be some out there who have bought property this way and would be able to share their experiences.
posted by VC Drake at 12:16 PM on January 11, 2010

Good lord. Purchases of property in these situations require a lawyer from your jurisdiction to look over the matter. Especially involving quit claim deeds. Contact a local real-estate attorney to advise you on this matter.

I am not your lawyer. I am probably not a lawyer in your jurisdiction. Please seek legal advice in your jurisdiction.
posted by Ironmouth at 12:29 PM on January 11, 2010 [1 favorite]

Lawyers don't do the searches, title insurance companies do. I am not sure they can provide the actual insurance on a quit claim deed, but I am no expert here. They are going to do a much better job of searching than you will because that's what they do for a living. If you want to save the money (a few hundred dollars) then start off yourself. If you find a big lien on the place or something that kills the deal then you just saved yourself the cost of the professional search, but it would be pretty foolish to scrimp on a few hundred bucks for the search when you are putting tens or hundreds of thousand at risk, same with the lawyer. They know one thing you don't, the law, and it can get pretty tricky on these subjects. If you have the money for the property you have the money for a lawyer (probably $500 or so, flat fee).
posted by caddis at 12:29 PM on January 11, 2010

You may want to see if possibly a real estate person or a broker for a title company might be able to help you for free?

I only dealt with Quit Claim for transfering property rights during a refi (getting husband's name off). Sorry. Good luck.
posted by stormpooper at 12:31 PM on January 11, 2010

So consulting a lawyer is not necessarily the answer. And, likely, anything they can do when it comes to research is something an individual can do if they just know where to look.

You are incorrect. Real estate law is intricate and jurisdiction-specific. It is the oldest part of our legal system and the amount of legal terms of Latin and Old Law French applying to land sales and title are excessive.

This lawyer cannot advise you strongly enough to consult with a local attorney when buying property involving a quit claim deed.
posted by Ironmouth at 12:32 PM on January 11, 2010

Without getting into any details, the kinds of deeds available vary by state, as do their names. You need local counsel to guide you though this.

My recollection is that, in essence, all you get with a quitclaim deed is a covenant that the seller hasn't sold to anyone else. This is very minimal protection.

At the end of the day, my advice would be that if you can't afford a lawyer, you can't afford the risks associated with going forward with this kind of transaction.

I am not your lawyer; this is not legal advice.
posted by Admiral Haddock at 12:37 PM on January 11, 2010 [1 favorite]

In general, title insurance protects purchasers against defects in title to the property. So say you buy land from Joe, but Joe didn't actually own the land because of some conveyance problem 100 years ago. If you bought title insurance, you're supposed to be covered against the loss (subject to what the title insurance policy actually says, etc.) Note that title insurance companies might not underwrite a conveyance supported only by a quitclaim deed.

Mortgage lenders often require title insurance before they will loan money.

People involved in the title insurance business can provide you with more specific advice about their product and what it actually may or may not cover in your situation. This is just a generalized comment; for specific advice about the ins and outs of property conveyance, consult a lawyer licensed in the state where the property is located. IAAL but IANYL.

BTW, and at the risk of invoking this recent metatalk thread, isn't the "I'm not a lawyer type of person" sort of like saying: "I have some weird pain in my chest, but I'm not a doctor-type person and everytime I've gone to a doctor, they have to research things themselves that an individual could do if they just know where to look."
posted by QuantumMeruit at 12:42 PM on January 11, 2010 [2 favorites]

Another lawyer here--not your lawyer--chiming in to say Admiral Haddock is exactly right. Saving money now by not consulting a lawyer will result in many headaches and spending more money later.
posted by pasici at 12:45 PM on January 11, 2010

There are quit claim deeds, warranty deeds, bargain and sale deeds, executor's deeds, referee's deeds...
posted by Lucinda at 12:46 PM on January 11, 2010

seconding caddis and lucinda. Title company clerks research land titles - that's why you pay them and they have huge bonds and insurance. quit claim deeds are for close family members. those real estate transactions in the newspaper or in the property sale history that say, like $100 or even $1? those are quit claims between family.

sort of like when a low-value car sale used to end in a handshake and wink agreement to write a sale price of $50 on the title so you could save on your tag and impact fees? don't play that way with land.
posted by toodleydoodley at 12:49 PM on January 11, 2010

I'm not a lawyer type of person, so there's no need to reference lawyers anymore.

Then you shouldn't be buying land. You double extra shouldn't be buying land you don't need just as an investment. You triple extra shouldn't be buying land with deeds that seem weird even to you.
posted by ROU_Xenophobe at 1:05 PM on January 11, 2010 [2 favorites]

My family has bought houses and farms over the years without lawyers. I've done my own divorce without a lawyer. How many people actually have a lawyer? Just sounds like a lifestyle that is privy to some (because they actually need one on a regular basis or it's part of their lifestyle) and foreign to the average person. And it is no guarantee.

As an aside: Is there something with IANYL that is protection? A protection against being sued? If someone hasn't signed a contract with someone else, how could there ever be any construed or misconstrued legal relationship?

Just curious. I'd seen that before on here and on the Internet and wondered if others had suffered repercussions from giving advice which prompted everyone to add a disclaimer.
posted by VC Drake at 1:07 PM on January 11, 2010

How much can a lawyer cost? $300? $800? Mine charged me $800 to buy real estate. How much are you spending. Feel like losing it due to your own ignorance? If so, skip the lawyer.
posted by Geckwoistmeinauto at 1:14 PM on January 11, 2010

It's funny you should mention it VC Drake, as there was a really long thread about legal protections on the grey last week...
posted by Admiral Haddock at 1:18 PM on January 11, 2010

Seriously, dude. I'm a real estate lawyer, and so, so, so very not your lawyer. If you don't know what a quitclaim deed is and how it is different from other deeds in your jurisdiction you have no business doing title research yourself. Looking in the recorder's office is only the beginning.

Sure, you can look up the address if the indexing system is good and the clerk at the recorder's office is feeling nice, but do you know how to read legal descriptions and track them around a survey? Do you know why that's important? Do you know what makes a deed an effective instrument in your jurisdiction and how to evaluate the effectivenss of deeds upstream in title? Do you know what easements, convenants running with the land, and servitudes are? Do you know when you need to cross-index parcels? Do you know where to check to make sure that the land was subdivided properly? Do you know how to check for government liens on the property, which agencies to check with, which questions to ask, and how any liens placed on the property interact with mortgages in general and purchase-money mortgages in particular? Do you know what kinds of releases you should be looking for?

All of these impact whether how dodgy accepting a quitclaim deed is. A skilled title agent knows how to do this research and evaluate the risk, but the ones that I know aren't going to be happy advising you about whether a quitclaim title is "dodgy." And research on the Internet ain't going to tell you too much, either. In fact, I'm telling you that there are answers in this thread that are flat-out wrong for the jursidiction that I practice in, and possibly for the one you're interested in.

Basically, I'm having fun imagining Ironmouth's head exploding.
posted by joyceanmachine at 1:24 PM on January 11, 2010 [2 favorites]

How many people actually have a lawyer?

Nobody is suggesting that you "have" a lawyer. Only that you hire one for the purpose of this proposed transaction, in which case the lawyer will owe a very high level of professional care even though you will never see each other again. The idea that only wealthy people use lawyers is bizarre, up there with the people biscotti runs into who think that "having" a veterinarian is a weird upper-class affectation.

Is the lot the one in Eureka Springs on your webpage? If so, I can understand wanting to avoid shelling out a few hundred bucks when that could be 10% or more of the final selling price.

On the other hand, I wouldn't buy land with a quitclaim deed. The only circumstance I could imagine using one is if I were buying someone out of land we owned together (or I were being bought out as a partial owner), or buying someone out of a dispute over ownership (here's $2K to agree that it's not yours, even though I don't think it is). In all these cases, I wouldn't be buying the land, only paying someone to agree that they don't have any interest in it.

Yes, all of the things you list in your original question, and more, are possibilities with a quitclaim deed. They are also possibilities with a warranty deed.
posted by ROU_Xenophobe at 1:36 PM on January 11, 2010

No, it's not the lot in Eureka Springs. That's a typical real estate transaction through a local realtor in ES. The only thing with that one is they're behind 2 years on taxes, but with taxes as low as they are in the Ozarks, that's not that big of a deal.

This is 10 acres in Iron County, Missouri. It's actually on eBay. Sorry I don't have the link handy. Before I hear a whole bunch about eBay, I've bought land on eBay before without any problems. Not to mention a bunch of other crazy things that others would think strange, like a school bus. Never had any problems. As a matter of fact, the bus turned out to be a fantastic deal. Ran like a dream for an excellent price. And a rain barrel that I thought would be outrageous to ship. No problem, got it just fine.
posted by VC Drake at 1:51 PM on January 11, 2010

Oh, yeah, Admiral Haddock, interesting... still reading it.
posted by VC Drake at 1:52 PM on January 11, 2010

the "see a lawyer" advice may be irritating, but I'd say that real property transactions are #2 on the list of things where a lawyer's help is essential. even if the purchase goes smoothly, you may end up having problems if/when you try to sell the property. it sounds to me like you've been buying property with no way of knowing what exactly you're buying.
posted by lex mercatoria at 1:54 PM on January 11, 2010

Well, I'm pretty sure I know what I've been buying because I've lived there.

It's not so much that it's irritating advice as it is just not that terribly useful. I know I can go to a lawyer. I'm not being told anything that isn't something I can figure out on my own.

It doesn't provide me any insight to my question which is what I'm after. And, you never know, maybe there's someone on here who has experience with rural properties and quit claim deeds and might have some stories to share, good or bad.
posted by VC Drake at 2:03 PM on January 11, 2010

Here's the link to the property for anyone who's interested.
posted by VC Drake at 2:30 PM on January 11, 2010

Also, I just contacted the seller to see why he's using a quit claim instead of a different deed type. He's easy enough to work with. I've asked him another question and got a polite and generous and quick response. It's likely all legit like everything in my life has always been. I don't know why I was raising so much concern in my question here. I think because when you Google "Quit Claim Deed" it doesn't sound too reassuring. But I'm remembering from the past that it is a fairly common type used in rural properties. And, like others here have said, for transactions between relatives.

For any of you who don't know, Iron County is a beautiful county. Maybe someone here will beat me to the punch on purchasing. If so, you'll have yourself a lovely place.
posted by VC Drake at 2:41 PM on January 11, 2010

My state requires that a buyer of real estate have a lawyer representative. When I learned that, I was stunned. Stunned that I hadn't done that when I bought my first house (D'ho!), and stunned that the state actually had a law to help protect the least powerful person in the transaction. Buying real estate is, for most people, one of the biggest financial transactions of their life -- it's very strange that so many people balk at the tiny cost of having someone knowledgeable working to protect against what may be a devastating mistake, particularly when they're paying several people much much more to push them into the agreement. (My back-of-envelope estimate of cost is somewhere between 0.1% - 1%)

Here's what every real estate transaction looked like to me, as a buyer: The buyer has to go through many, many hoops to secure a loan. There are strange and seemingly arbitrary fees that generated from a complex financial structure, and even the ones that seem reasonable (eg. proration of taxes) will have a sophistication far exceeding 99% of all other transactions. And then, on the magic day, the buyer walks into a room of sharks, every one of them with a strong motivation for the buyer to sign; every one of them familiar with the rituals and contractual obligations being finalized, and none of them are actually risking anything beyond the opportunity cost of arranging this deal. It sure would be nice to have someone knowledgeable there helping to protect your own interests.

My experiences with lawyers, though limited, is mostly positive. It looks like this: I make an appointment; when I meet them I lay out the facts and circumstances in as concise and straightforward a manner as I can (mindful that since I'm paying based on time, it would be foolish to waste it); the lawyer asks me relevant questions, extracting details that I may not have thought important. Then the lawyer gives me a pragmatic assessment of what my actionable options are, and a range of likely results. More than once, the lawyer has waived the consultation fee; ymmv. Here's what I don't do when I consult a lawyer: I don't try to use them as a therapist, or an audience to vent at, etc. (well, no more than a couple sentences, anyway).

Re. Quit Claims. I was advised that a Quit Claim was a red flag -- that anyone with an interest in the property (lenders, buyers, sellers, just about anyone with any interest at all) would home in on that flag, making everything more difficult and uncertain than necessary. This advice was specific to my situation, in my state, at that time. The only thing you should infer from this anecdote is that it would be in your self-interest to consult a lawyer versed in real estate in your state.

I think forgoing a lawyer where the stakes are high is like forgoing safety harness & helmet when taking a race car for a few laps ('cause, hey, usually you won't crash)
posted by Tuesday After Lunch at 2:50 PM on January 11, 2010

Aha! Got my answer. (Doesn't mean I wouldn't want to hear stories from others. Still interested in other's experiences.)

From the Seller:

"There are no liens on the property. I purchased this property at a tax sale and hold a Collectors Deed. I will be selling with a Quit Claim Deed.

A collectors deed is a type of deed that is issued from the county collector when someone purchases property from a tax sale on the courthouse steps. By law, it is a legal deed of ownership which transfers the property from the former owner to the new owner, via the county collectors office. I would sell by way of a warranty deed, but I would have to file through the court for a quiet title on the property and for the price I'm asking it wouldn't be profitable for me to do so, unless at some point the property values start rising again. The new owner can always file for a quiet title. Usually the only reason to have one is if the owner wants to get a loan on the property, through a bank."

Learned something new.

And, again, lawyers are for some and not for others. Many real estate transactions are done without lawyers like when you do a simple contract between the buyer and the seller referred to as "Owner Financed." I think the law you may be referring to about a lawyer being present is handled by most people at the Title Office at closing, there's a lawyer there, unless you bring your own. As far as how rural folks get by with buying and selling land without one, I don't know. All I know is the property I had was a simple transfer from him to me, which this one here would be the same just with a different type of deed. And the more properties I do, the more educated I will become.
posted by VC Drake at 3:05 PM on January 11, 2010

A contact of mine bought a Quit Claim deed to a property at a tax sale a few years ago. After he got the title, there was some mess involving wills/probate, back taxes, and three or four different parties claiming to have a valid claim to the property. In the end, he paid some massive legal bills, lost the property, and if I recall correctly got sued by one of the claimants for something or other after the initial dispute was resolved (he won, but the bills sucked.. again).

IANAL, IANYL, I don't know if that was a typical level of WTF, but I'd steer clear.
posted by Alterscape at 5:38 PM on January 11, 2010

First of all, I am a lawyer. But I am not your lawyer. In fact, I would not take you as a client, because it sounds like you would not be a good client. Everyone here is telling you to talk to a lawyer, and not because they want you to spend money on a lawyer - because they don't want you to get screwed. You may never appreciate the benefit of a lawyer, and if you do, it will probably be because you got supremely screwed over. I hope that does not happen. Because I don't want that to happen, I am going to take one last run at explaining the seriousness of this to you in black and white, because I don't want to see anyone on Metafilter get supremely screwed.

First of all, the property in question is easy to find on eBay - do you understand the implications of there being no deeded access to the land? That means that there is not necessarily going to be any way to get to the land. The owners of the surrounding land could prevent you from ever accessing your land.

Also, do you understand that your maximum liability with respect to this property, if you buy it, could exceed the amount of money you are paying for it? You could, for example, expose yourself to massive, bankrupting, life-destroying liability, like environmental liability. You are not risking $6500. You are risking $6500 + the unknown, and you are talking about doing so when you could easily find out how much the unknown is by spending no more than $800 or so.

Is it possible that the owner may not even own the property and therefore has no right to sell it? Is it possible that someone else may come after you and say they're the ones that actually own the property?

Yes, both of these are possible.

Or is it considered perfectly legit and I'll likely encounter no problems.

It's not a legitimate or accepted way to transfer property between unaffiliated parties.

A "quit claim deed" essentially means that a seller is making absolutely no promises about the nature of the property or his ownership of it (in fact, he is disclaiming all such promises). It's like saying, "Hey, see that land over there? I'll sell it to you. I'm not gonna promise you that I own it, or that no one else owns it, or that there is no mortgage on it, or that there aren't more taxes on it, or even that I have anything to do with this land at all. In fact, for all you know, I just got off the bus and I am trying to rip you off. The sky is brown, up is down. Wanna buy a bridge to go with your land?"


And, again, lawyers are for some and not for others.

Lawyers are for people who don't want to get screwed and lose all their money. Not just the money they paid, but ALL THEIR MONEY. ALL THEIR SPOUSE'S MONEY, TOO. If you get a local lawyer, it's not going to cost that much money. He or she is going to advise you what the fact that you are getting this kind of deed really means about your property, and he or she is going to advise doing other searches and checks to figure out the true nature of the land. You will be able to get a much more complete picture about the nature of the title available to you. This stuff is super complicated. A layman can not hope to understand the intricacies of title history and records. Like I said, I am a lawyer, and I would never, ever, no matter what, even from my own family member, buy any real property with a quit claim deed unless I had an expert do extensive title research. Even if it was just to ATV in on and camp and hunt deer. (In only ten acres?) And probably not even then.

Just pretend that the price of the land is $800 less. Google lawyers local to the area. Call them up, and tell them that $500 is all you can pay, but you need them to advise you on this land purchase and do some title searches. The title searches might cost you $300, or not. Everything will probably be fine, and you'll feel like you wasted some money. You didn't - you avoided the other possibility, which is that you are getting completely and utterly screwed by something you can easily avoid.
posted by iknowizbirfmark at 10:23 PM on January 11, 2010 [3 favorites]

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