Real Estate Closing Details
Quitclaim Deed Information
General Warranty Deeds
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Real Estate Closings
Let us handle your real estate closing for you! We work with buyers, sellers, lenders and real estate agents to insure that your purchase or sale is handled promptly and efficiently. From receiving the contract through sitting at the closing table, Harry Marsh Law will be with you every step of the way.
Our services include: Ordering and reviewing the title and clearing up any problems that may arise; ordering and reviewing the surveys to let you know of any encroachments or problems; preparing preliminary documents for the lenders; keeping you and/or your realtor informed at all times; preparing the final closing package and sending you and/or your realtor a closing statement for review prior to closing; same day recording of documents whenever possible; disbursement of funds, returning the closing package to the lender; cancelling the old mortgage and follow-up when needed.
We will coordinate with your lender and your real estate agent to make sure your transaction is smooth and professional.
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.
General Warranty Deed
You might have seen my article on ‘quitclaims’ or ‘special warranty deeds’
This article may represent what is the opposite of the quitclaim, a General Warranty Deed.
Obviously, a General Warranty Deed conveys title with warranty.
But, the legal world isn’t easy, and this legal document is no better.
Start your examination of the document by seeing if it has been prepared by an Attorney. That should be listed at the top of the document. It may also reference whether a title search or opinion has been performed.
If you don’t see this language, it might indicate to you that the owner drafted his/her own deed.
To aid in this understanding, next search for something on the document referencing title insurance.
I ask about these distinctions because it is important for you to understand who is responsible for the Warranty on the deed. There are multiple ways to give a warranty, including:
- Warranty by the seller. The seller warrants that there is free and clear title to the property.
- Warranty by the attorney, via title search/opinion. The Attorney has certified that he conducted a search and that there is free and clear title
- Warranty by title insurance policy. This is backed by a regulated insurance company who will pay your claim, legal fees, etc etc, if the title defect is covered by their policy.
Again, you can see that the ‘warranty deed’ is not as simple as it seems. For example, a General Warranty Deed with no title search performed by the Attorney (very common) will give you a warranty on the property, but the warranty is only enforceable against the seller that sold you the property. It is entirely possible that a seller could give you a general warranty deed and run off with your money, knowing that someone else had a previous mortgage on the house.
In short, you’ve received a general warranty deed with very little ‘meat’ behind it. The seller guaranteed the property, but if he has no assets or doesn’t live in the area, you might end up with a worthless piece of paper that you exchanged for a substantial amount of money.
On the opposite side of the spectrum is purchasing the property through General Warranty Deed being backed by title insurance. A qualified Attorney who has been approved by whatever title insurance company he chooses, performs a title search. He writes a report and submits to the title insurance company, who chooses whether or not to give title insurance. If defects in title are discovered, that Attorney often works with the title insurance company (in advance), to clear title and make sure that there are no future issues.
Even the issue of title insurance is not clean and easy: there are various types. But, title insurance will cover/give warranty for most buyers under most circumstances.
In short: buy title insurance and make sure you’re given a General Warranty Deed. But also, make sure that the Attorney preparing these documents for you knows what he is doing. The smallest detail could determine if you have someone that will pay a title defect, or if you’re left defending yourself
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.
If a Grantee is purchasing a property through a mortgage, the mortgage company will require that they purchase the property with a General Warranty Deed. After all, the mortgage company wants to make sure that you will repay their debt, and that some other entity won’t take the home from them. The mortgage company wants to be #1 in line.
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.
Do I need a Realtor to Sell my House?
I’ve been doing closings and real-estate related work for a long time. This is a question that I field, in one way or another, many times per week. I’m not trying to get your commission, so I think I’m best suited to answer this.
Many people see the 6% that Realtors earn off your sale and want to avoid that charge. On a $200,000 house, this could save you $12,000.
Like anything in the world, the answer is : It depends. But, I’ll try to tell you why I think it depends, below.
A realtor has access to the Carolina MLS, which is only available as an expensive benefit of being a N.C. Realtor. This is a large program that allows the Realtor to input all of the information about your property and tell the world that you have it listed for sale. It’s by far, the most useful tool you have in trying to market and sell your property. Within minutes of listing a property, 100s of websites online pick the information up and rebroadcast it via their personal website.
If you aren’t using a realtor to do the above referenced marketing, you’re probably limiting your Property to 50% or less of the available buying pool. You MUST have this access. It’s true that you can pay services to do this for you. They charge less than the typical commission earned by a full service realtor. That service should be a necessity, at the very least. You look at paying $500-$1,000 just to list on the MLS, if you avoid full service Realtors.
You, as the seller, are responsible for paying the commission of the Realtor (typically). Most buyers in this market are represented by their personal Realtor who has signed an agreement with that Realtor whereby they will earn 3% upon purchasing a home through them. It can be a lot of work, a lot of hours and much drama….for the Realtor to earn that commission.
But, you as the seller, can avoid the 3% listing commission to your own Realtor by using the $1,000 listing service referenced above. However, consider that you probably cannot avoid the 3% purchase commission to the Realtor representing who wants to purchase your home.
How likely do you think it is that a Realtor will show your home if they know you’re unwilling to pay any Realtor, any commission? More than likely, that Realtor won’t even forward your house to their clients for review.
Again, if you try to avoid the commission to be charged by Purchaser, you’re probably losing enough potential buyers that it counteracts any savings that you might discover. So, you’re likely only to avoid the 3% listing commission (less the MLS cost).
As shown above, you’re likely only to save 2-2.5% by avoiding your own Realtor. But, without your own Realtor, you have noone to negotiate the purchase of your home. You’re going to find yourself in a high-pressure and drama filled negotiation with the Realtor for the Purchaser. This is a real estate professional (ideally) who knows what is standard in the market and what to ask you for (repair requests, earnest money, due diligence, etc). If they know you are not represented by another Professional, they could use this to abuse you.
If that Realtor slips something into the 13 page offer to purchase, are you going to be able to see that that clause hurts your sale of the house? Do you know what is reasonable and what is not reasonable when you receive the $10,000 repair request that is likely to be forwarded by Purchasers? Do you know how much $ should be placed for Due Diligence or Earnest Money? Do you know what ‘Time is of the essence’ means regarding the contract? Do you know when the 14 day automatic extension to close is invoked, and when it is not?
I could continue this paragraph for 3 pages, but the point is that your lack of representation could end up costing you far more than the money you would have saved. An argument could be made that your real estate professional, representing you, will be able to tell you which buyers are serious, which buyers are not, and which you should avoid.
I can’t tell you how many contracts come in through our door that have no chance of approval. The Purchaser has submitted a contract and has a financing type that has no chance of approval on this home, but the seller has no idea because they aren’t represented. Do you want that 3 month delay, before you hire someone to represent you?
Something goes wrong. I’d guess that 20% of real estate purchases have a major disagreement about something, anything. It might be about the contract date, a repair request, a deposit: anything. Who do you blame? If you’ve written the contract, you’re to blame. If your real estate professional has done something wrong, you have someone to point your finger at, and say, “Fix it.”
This is an undervalued consideration: time. Many think that Realtors are paid too much for what they do. And, in some circumstances, I think that too.
But, in other circumstances, you’ll be very happy that you aren’t the person arguing with the buyer or seller about whether a stain in the carpet needs repaired, or spending hours on the phone coordinating inspections, or appraisals, or loan documents. Most of this can be done by you, to cut out of the Realtor. But, you need to ask yourself how much this is worth to you. You’ll have to figure all of this out while you go. The Realtor knows who to call, who to trust, and how to make your life easier. That should have value to you.
This doesn’t mean to say that you should ALWAYS hire a Realtor. If there is a specific property that you want to purchase, and you only want to purchase that property, AND you’ve already reached terms with the owner, there are far fewer incentives to Realtor representation.
The last question: Can my Attorney do all of this for me?
If you find one that wants to take on the work of 2 Realtors, assume all of the risk and do it all for the cost of a real estate closing, let me know when you find them. I’ve got some work for him/her. I’ve got some options that might be able to save you a few bucks or reduce the commission a bit, but there are rarely ‘free’ shortcuts.