Quit Claim Deed vs. Warranty Deed - A Difference Indeed

A quit claim deed is the legal way that one person (the grantor) transfers real property, such as a house or land, to another person (the grantee). As an example, a divorcing husband may quit claim his interest in certain real estate to his ex-wife.

While the concept is simple and straightforward — relinquishing all ownership claims to a particular property — it’s also important to note what a quit claim can’t do.

In renouncing claim, the grantor makes no guarantee or promise that the property is free of debt. Another important distinction is that the grantor makes no promise that no one else claims to own the property. Tracing its origin to Anglo-Norma times (circa 1,000 CE), the quit claim deed says, in effect, that the grantor is signing over whatever ownership he or she may have in the property. It does not even guarantee that the grantor has any ownership interest at all. By accepting such a deed, the grantee assumes all the risks.

Furthermore, many title companies are reluctant to insure title when a quit claim deed was used previously to transfer title, and therefore, recommend use of a warranty deed instead. A warranty deed conveys full title to the property and warrants that title against defects such as tax liens, legal judgments and unpaid debts.

To figure out the differences between a simple quit claim and a warranty deed, I recommend you consult your real estate attorney for more information.

What To Expect in a Real Estate Closing

Conducting a real estate closing is regarded as the practice of law by the South Carolina Supreme Court. As a result, all parties in a South Carolina real estate transaction must be represented by counsel. It is permissible for the parties to engage the same attorney in a dual representation capacity provided that each party agrees in writing and consents to the conflict of interest involved. However, this is not advisable in the purchase or sale of your home and you are encouraged to engage your own attorney.

Your closing attorney's task is to conduct the title examination and prepare all documents for settlement. If you are a purchaser and financing is involved in your transaction, your attorney will coordinate with your lender. Your law firm will also likely be able to assist you in obtaining title insurance. You will receive finalized documents for your execution either through the mail from your attorney or by personally meeting with your attorney. In some instances, you may also authorize your attorney to execute all documents on your behalf via a power-of-attorney. The documents presented to you at closing will include an itemized settlement statement which will fully address all financial aspects of the closing such as proration of taxes, assessments, etc. All funds in the transaction will be channeled through your law firm's escrow accounts.

As a purchaser of real estate, you will likely be asked by your attorney to provide applicable information. This will include the manner of holding title, anticipated insurance provider and your plans, if any, to finance your acquisition.

As the seller of real estate, you will need to provide the names of any lenders that hold a mortgage on your property.

The process will be guided by your attorney. You may initiate the process by identifying your attorney and asking your real estate agent to provide the sales contract to your attorney. You can anticipate that your attorney will contact you and specifically request relevant information and materials.

The local custom in South Carolina is for each party to meet with an attorney individually. Contrary what you may have experienced in other states, it is very likely that you will never meet the purchaser of the home you are selling or the seller of the home that you are acquiring.

There is value in selecting a law firm that has the resources to handle a number of your needs and is willing to stand behind its work. Although the vast majority of real estate transactions proceed smoothly to closing, it is helpful to have a firm that handles a variety of matters including litigation in the event that you have a difficulty arise. If you are moving to South Carolina, there is value in having a law firm that is able to handle any corporate and estate planning work that needs to be reviewed for compliance with South Carolina law.

If you have further questions or concerns relating to your real estate needs, attorney Bret Pruehs with McNair Law Firm on Hilton Head Island, SC will be glad to answer your personal questions. Bret is available at 843.785.2171 or at bpruehs@mcnair.net.