Quitclaims are necessary in many North Carolina real estate closing circumstances. Before we discuss why you may need a quitclaim, lets discuss what it is.
A Quitclaim deed is also known as a special warranty deed. This is a very different thing than a General Warranty Deed. A quitclaim deed is a legal instrument which transfers interest in real property from the Grantor to the Grantee. Think of the Grantor as the Seller and the Grantee as the Buyer.
The easiest way I can explain a quitclaim deed is to think about the bundle of rights that you, as a property owner, may have. You may own a house subject to a mortgage, homeowner’s association, easements to your power company (to run a power line through the back yard), etc etc. The sky is the limit regarding the number of agreements you can make with your neighbors, mortgage companies and other entities. So, your ownership interest is the combination of all your rights, and also obligations. If you sell your land with an easement, that easement is likely to continue to the next buyer. If you sell your land without paying off the mortgage, the mortgage company is likely to foreclose on the next owner and take the house back. The same may be true of judgments and other issues with the property that are properly recorded down at the County Courthouse.
Back to the quitclaim: A quitclaim does not give title insurance. It gives the Grantee (remember, buyer), no warranty as to the status of the property title. In essence, the quitclaim ‘quits’ any right that the Grantor has to the property regarding their bundle of legal rights. Basically, the Grantor gives whatever ownership interest they have to the Grantee. The Grantor makes no warranty or promises regarding clear ownership or otherwise: the Grantee ends up owning whatever the Grantor owns. In practice, a quitclaim is effective to transfer title to the property much of the time. You might not need title insurance. The Grantee (buyer) ends up with whatever rights the Grantor (seller) had. As long as the Grantor had clear legal title to the property, the Grantee ends up with that same clear legal title.
Sure. A qualified attorney can perform a title search and upon the property payment to a title insurance company, you can turn your quitclaim into a General Warranty Deed. However, any problems that existed at the time you did the quitclaim may again surface, preventing you from receiving a General Warranty Deed.
Very common. Despite the fact that you are legally divorced and separated, if you owned property in North Carolina while you were married, your spouse was given a marital interest. It doesn’t matter if you have a divorce decree stating that the husband or wife gets the house, or you’ve got a letter from them stating as much. As far as the Register of Deeds is concerned, and title insurance is concerned, the x-spouse may have an ownership interest in the house. In order to get rid of that interest, they often require a quitclaim from husband and spouse (Grantors) that places ownership into only one name (husband or wife, Grantees)
The easiest sort of quitclaim is from one party to another. Only one signature is required. The Grantor will sign a quitclaim placing ownership interest into the name of the Grantee. The Grantee does not need to sign. This could be far more complicated. As you imagine, 9 Grantors requires 9 notarized signatures, and cost may increase. Plan on $400 and up to have the Quitclaim created, executed and recorded.
About two hours, assuming there are no problems.
Less than a day. Some Counties have electronic recording in North Carolina. This allows us to record the quitclaim within a few hours.
If you’re buying a property with cash, a quitclaim can save you 200 or so $ in closing costs. But, the risk is on you regarding title insurance. Please see the Title Insurance page for more information.