Read this before buying any property with a Quitclaim deed history

As a real estate agent, I’ve seen buyers get excited over what seems like an unbelievably great deal—a home listed at a highly competitive price but stays in the market for months in a highly sought after market to justify an even greater price cut. But there’s something that could put your investment at risk if the seller previously acquired the property via a quitclaim deed and you don't do your due diligence as a buyer.Chances are that many other potential buyers are doing their due dilgence which might be one of the reason that an otherwise highly desireable property is sitting in a highly competitive market for so long.

A quitclaim deed transfers ownership without any guarantees. If the seller’s history includes a quitclaim, you need to dig deeper. Even if you’re getting a warranty deed, the seller’s previous deed could create complications down the road if you don't do your due diligence.

Why the Quitclaim Deed Should Raise Flags

When the seller acquired the property via a quitclaim deed, it means there was no guarantee that the title was free and clear at the time of the original transfer. While a warranty deed offers protection against title defects during the seller’s ownership, it doesn't always protect you from issues that stem from prior transfers.

Key Risks for Buyers

1. Potential for Future Claims on Title: If the previous grantor didn’t have full ownership or there were unresolved claims, you could face future legal disputes. This could include heirs of previous owners, creditors, or other parties who may claim they have a rightful interest in the property.

2. Unresolved Liens or Encumbrances: Because a quitclaim deed doesn’t guarantee a clean title, unpaid debts, tax liens, or legal judgments tied to the property could surface after you close. These could lead to unexpected costs and possibly delay your ability to resell or refinance the property.

3. Challenges with Title Insurance: In some cases, title insurance may exclude certain issues from coverage if the property has a quitclaim history.

4. Difficulty Selling or Refinancing in the Future: Potential future buyers or lenders may hesitate or refuse to move forward with a transaction if they see that the property has a questionable chain of title, especially if it involved a quitclaim deed. This can affect your ability to resell or refinance the home down the line.

5. Possibility of Clouded Title: A clouded title—meaning the property has conflicting claims of ownership—may result from a previous quitclaim deed. You might be left with the burden of clearing the title, which could involve lengthy and costly legal actions.

Why It's So Important to Do Your Homework

While the warranty deed may seem like a secure option, the seller’s history of title still matters. To protect yourself and your investment, here’s what I recommend:

• Work with the title company to get a full title search to check the complete chain of title and verify there are no unresolved issues from the past.

• Consider obtaining title insurance that fully covers any issues arising even from the quitclaim deed history.

• I always recommend to buyers that they consult a qualified real estate attorney before closing if the previous title history has a quit claim deed involved.Legal advice or interpretation on any specific deed is outside our licensed scope of practise as real estate agents. You should consult a licensed attorney to navigate the specific risk involved with a property that has a history of quit claim deed before you proceed to closing. This ensures that any additional risks are properly addressed before you commit. 

Disclaimer:
This article is intended for informational purposes only and does not constitute any legal advice or otherwise.This are only views or perspective of the author. It does not provide any type of legal advice or substitute for any professional services. Buyers are strongly encouraged to consult a licensed attorney before closing on a property that involves a quitclaim deed history. We assume no liability for actions taken based on this content.

If you want to buy or sell a property anywhere in oregon feel free to call or text me at 971.91.JOSHY or visit tryjos.com. I can help you to achieve your real estate goals.