GRANT DEED vs QUITCLAIM DEED: Why a Grant Deed and why a Quitclaim Deed? This is a topic that has been asked time and time again. Both are instruments of conveyance, but why use one and not the other? The answer lies in the warranties (responsibilities) that follow the conveyance.
Using a Grant Deed to transfer ownership implies (or warrants) that:
(1) The person granting the property (Grantor) did not transfer it prior to this conveyance,
(2) The property is transferred free from any liens or encumbrances placed on it by Grantor, unless allowed by person receiving the property (Grantee)
(3) Absolute ownership or “fee” title is conveyed,
(4) Any ownership that come to the Grantor afterwards – “after-acquired” title – is also conveyed.
On the other hand, when using a Quitclaim Deed you will notice right off that in the language of the form, the word “grant” is substituted for the word “quitclaim” or the words “remise, release and quitclaim”. That means that there are no warranties regarding any liens or encumbrances existing on the property, and there is no transfer of any “after-acquired” title. But most importantly, the Quitclaim only transfers whatever present right, title or interest the Transferor may have. It is not an actual conveyance of ownership and it is not concerned with past or future interest.
This is why when we ask a person to sign off whatever community property interest he/she may have in a property that the spouse is purchasing, we ask for a Quitclaim Deed. The spouse cannot warrant (1), (2), (3) or (4) above.
As a further notation, in many REO transactions the REO Lender selling the foreclosed property may use a Quitclaim Deed. The reason behind that also relates to the 4 items. The REO Lender will only transfer whatever rights they have acquired under foreclosure and give no other warranties with respect to what has happened on the property in the past prior to foreclosure. Buyers under such terms should do all their due diligence and get good title insurance.
Perhaps next time I will write about Deeds in general, what are the requirements under California Law that make a Deed good, valid and effective.
WHAT WE CAN LEARN FROM INCEPTION: Did you watch Inception, the movie? The gist of the movie was how to get someone to do something by tapping into their subconscious through their dreams. Of course, this is a super simplified description of a movie that is not, in any way, shape or form, “simple”. You will need to watch it several times to understand and appreciate its nuances. But to lead into this next issue, I bring up the main focus of the story – an extremely powerful man dies and leaves his son the business. Supposedly he also leaves “instructions” to the son on what to do in a safe, but he did not give the combination of the safe before he died. How do you get the son to look for this safe and its combination so that he can fulfill his destiny?
We all have assets that we must leave behind when our time is done. Bank accounts, stocks, bonds, properties, etc. If we are organized we will have all this very important information listed and filed meticulously. It may be locked away in a safe, a safe deposit box or it may be in our computer. Great! However, have we provided our loved ones with the combination, key or password? What if we are not organized and it is all over the place? Will our loved ones end up cursing us while they grieve? Not too long ago I received a call from a client who is ready to foreclose on a $300,000.00 loan. This is a big asset, perhaps even bigger than the value of her present home. Unfortunately, her husband, who passed away several years ago, took care of all the finances and probably put the all-important Promissory Note in a “safe” place. My client is absolutely distraught as she can’t find it and she will have a hard time foreclosing without this original document.
As you read this newsletter and this article from Liz Weston on MSN Money – make an appointment with yourself to get all the important stuff together. Liz gives us a list as a starting point, and she recommends a simple spreadsheet. Do it now. Give yourselves and your loved ones a little peace of mind.
If I should get in an accident and die tomorrow, will my husband know where to look for the key to our safe deposit box? Does he even know we have one?
HEY, HEY, MR. POSTMAN! Now here is a cute and instructive article that I must share. It is titled “13 Things Your Mail Carrier Won’t Tell You” and talks about various things I have never thought of. Did you know that it’s harder to read red envelopes and colored ink, or that felt tip pens are not good for rainy days? I especially like #7 and #13. Hey! We learn something new each day!
CREDIT CARD INSANITY: My son told me he got a credit card offer that would jump to 24.9% after the first year. We were scandalized, wondering who would be stupid enough to take such an offer. Well, I guess there are a lot of people out there who are “stupid” and many greedy financial institutions taking advantage of them. The following article talks about an offer at an astronomical rate of 79.9% APR. And there is this article of credit cards being offered to young children. Do you wonder why this country’s financial situation is so bad? Where are the lessons that the financial institutions should have learned 2007 through 2009?
HOW TO PLAY “HIDE AND GO SEEK”: What should you do if you are faced with debts that you are unable to pay back? It could be that 79.9% APR credit card, or it could be the mortgage on your home. Whatever it is, there are things you should and should not do and Liz Weston has delineated them in this article. The important thing to remember is that your debt issues may be short term. There is life after this debt and it could be a long and fruitful one. You don’t want to do anything now in the panic of the moment that will jeopardize your future.
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If… “A professional is someone who can do his best work when he doesn’t feel like it.”
Alistair Cooke, Journalist, (1908-2004)
Then, today, I am a professional!
Reminder: 2nd half property taxes for California properties are due by April 10th!
Juliana Tu, CSEO, CEO, CBSS, CEI
Escrow Manager
