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Can You Sell Your House With a Quitclaim Deed in Texas?

Can I Sell My House with a Quit Claim Deed in Texas?

A deed, or a property deed, is the legal document used in real estate that transfers the ownership of real property from the seller (grantor) to the homebuyer (grantee). A property deed is the most important document when buying or selling a house, but it’s also important to note that not all deeds are the same. 

There are numerous ways you can legally transfer property from one person to another, such as a quitclaim deed transfer, which “quits” the person’s ownership interest in the property. However, this type of deed isn’t really used in Texas, as they only convey the homeowner’s interest in selling the property without protecting the buyer’s new property title from superior title claims. 

Key Information About Quitclaim Deeds

As stated in the introductory paragraphs, the quitclaim deed moves a person’s interest in a property to a new owner. However, to understand what quitclaim deeds really are, we first have to get acquainted with another type of deed, the Warranty Deed. 

Warranty deeds are the most common type of deed used in property sales, which, in addition to transferring the title to the property to the buyer, also warrants against certain issues potentially associated with the title, including possible liens. 

More importantly, a general warranty deed provides a guarantee that the seller actually holds title to the property that’s being sold, adding a layer of confidence to the buyer. However, unlike warranty deeds, quitclaim deeds don’t provide any guarantees when it comes to property transfer. 

Quitclaim deeds don’t provide any information about who holds the title to the property; they only convey whatever ownership of the property the property owner has at the time of the transfer and provide a simple transfer of property from the seller to the buyer. Unfortunately, quitclaim deeds don’t provide any warranties when it comes to title defects.

Quit claim deeds are often used to transfer property between family members because the absence of a warranty requires a certain level of trust. Thus, this type of deed is mostly used by parents who transfer property to their children, siblings dividing real estate inheritance, adding a spouse to a property title, and removing an ex-spouse if necessary. 

This particular deed form usually includes information such as the description of the property, the name of the grantor who transfers the ownership rights, the name of the buyer who is getting the ownership of a property, the date, and notarized signatures. 

Selling Your Home With a Quitclaim Deed

It’s completely legally permissible to sell your home with a quitclaim deed. In fact, the sales process is much faster as it has less paperwork involved. Yet, given the lack of warranties, there’s a lot of risk associated with quitclaim deeds when transferring ownership to the property, particularly for the buyers. 

However, given the associated potential risks, the sellers might have a hard time finding a buyer brave enough to buy a home using nothing but a quitclaim deed. It’s more likely that you’ll sell your home with a quitclaim deed to a family member, close friend, or a living trust. Other buyers are more likely to distance themselves from these purchases due to inherent risks. 

You can still pursue a traditional sale of your home. Once you receive an offer, it’s generally best to let your real estate agent or real estate attorney help you gather all the necessary paperwork, including the clear title, and complete the real estate transaction legally. 

In case you’ve inherited a home through a quitclaim deed, the title will be transferred to your name, which means that you can easily sell your home to a new buyer, even through a quitclaim deed, if the buyer approves. 

The drawback is that some lenders won’t approve the buyer’s loan when the sale is done through a quitclaim deed. 

How to Sell Your Home Fast with a Quitclaim Deed in Texas

Well, this is where things get tricky. Quitclaim deeds are legal on a federal level and in all 50 states. However, these deeds shouldn’t be used in Texas due to the single section of the Texas property code, which states that previous unrecorded title transfers are binding to subsequent purchases. 

In simpler terms, if you sell or transfer the property to someone using a quitclaim deed, that transaction is still valid in the eyes of the law despite it not being recorded at the recorder’s office. The code also states that the buyer or the grantee of this property now has to honor this unrecorded transaction. 

However, let’s assume that you borrowed money against the property, and the lender has placed a lien on the title. After you sell the property via a quitclaim deed, the lien remains attached to the property and thus becomes the responsibility of the buyer. 

Additionally, the buyer might not be aware of previous transfers, which could potentially lead to legal disputes regarding the true ownership of the property. That’s why quitclaim deeds are often referred to as “buyer beware” deeds. 

Title companies and insurers in Texas also aren’t keen on working with and insuring quitclaim deeds, due to aforementioned reasons. 

Can You Sell a Home You Bought With a Quitclaim Deed

Yes, you can. When you buy a home with the quitclaim deed, both the deed and the title to the property are subsequently transferred to you, and you become the new owner of the interest in the property that has been stated in the quitclaim deed. 

Once you become a legal owner of the property, you can easily sell your home by using a warranty deed, or you can also resort to using a quitclaim deed if the laws and regulations approve such action. 

The main thing with quitclaim deeds is that they transfer the grantor’s (seller’s) interest in the property, whatever that interest might be. If the seller has full ownership of the property, then that ownership is transferred to the buyer, which is one of the many problems with quitclaim deeds. 

The seller might also have a partial interest in real estate, but the actual interest isn’t stated in the deed itself. This means that you only receive the seller’s interest in a particular property, and the seller isn’t legally obligated to tell you the size of their interest. 

This type of deed also offers no guarantees when it comes to the quality of the title. Quitclaim deeds don’t guarantee that the grantor has clear or even a valid title to the property or the legal rights to sell the property in the first place.

Once the transaction is completed and the sale has closed, all outstanding liens, encumbrances, and other title defects become the responsibility of the buyer. While it’s entirely possible to sell a home via a quitclaim title, you’ll be hard-pressed to find a buyer willing to risk potential financial and legal issues. 

Alternatively, you can sell your home to a cash-buying business, such as Sell My House Fast Houston TX, a cash buyer Huston home buyers rely on for fast and reliable sales that pay cash. 

Can You Sell Your House With a Quitclaim Deed in Texas?

Pros and Cons of Selling a House With a Quitclaim Deed

Despite their flaws, quitclaim deeds are still valid, even if they don’t transfer anything. However, they’re not without merit. Here are some of the most common pros and cons associated with selling your house with a quitclaim deed: 

Pros

Selling your home with a quitclaim deed streamlines the entire process significantly, at least when it comes to all the paperwork you need to gather in order to sell your home. This is because this kind of deed actually implies some level of trust between the grantor and the grantee. 

Quitclaim deeds are often used for non-traditional home sales, home sales, and property transfers between family members, relatives, close friends, children, and siblings. They’re actually quite flexible in that regard.

Cons

Despite the fact that they streamline the entire process, selling your home with a quitclaim deed on the real estate market isn’t all that easy since most buyers tend to be wary of such listings, mainly due to the lack of title search. 

Quitclaim deeds provide no assurances about the title’s validity or freedom from encumbrances, which is not only risky for the buyer but might even affect their financing if the sale of the property involves a quitclaim deed. 

Do’s and Don’ts of Selling a House With a Quitclaim Deed

It’s important to be very clear with the potential buyers and explain what a quitclaim deed entails and what are its inherent risks. These disclosures will help build trust and avoid potential legal issues down the road. It’s also a good idea to seek expert legal guidance to help you navigate the complexities of such sales. 

On the other hand, ignoring potential title issues can lead to legal troubles, and skipping the necessary checks can be very problematic in the future. 

Conclusion

The biggest advantage of quitclaim deed sales is that they don’t require extensive paperwork when selling a home. However, there’s a tradeoff in terms of guarantees, which deters potential buyers.

If you’re looking to sell your home fast, contact Sell My House Fast Houston, TX; we buy houses in Houston, TX, and we pay in cash. 

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