“The purpose of a quit claim deed is usually to protect someone’s interest in a property.”
House Selling Tips – Pennsylvania Home Buyers: If you have a quit claim deed on your house, you can still sell it quickly to an investor and the proceeds will go to all listed on the deed. A house owned on a quit claim deed will sell just like any other house but must be divided among the deed owners.
Where someone listed on the quit claim deed owes money, as in the case of an elderly parent that owes Medicaid money, it depends on the state law where you live. In some states they will be entitled only to his or her share of the proceeds of the house sale. The rest of the deed owners will have their shares distributed to them. In other states Medicaid may take all of the proceeds from the sale. You’ll need to know the law in your particular state.
The purpose of a quit claim deed is usually to protect someone’s interest in a property. An example would be the elderly parent that owns a home but wants to protect the children’s interest in it. He signs a quit claim deed that says he no longer owns the house, but the kids now do and would benefit from any profit that should come from it. Typically this is sometimes done when a parent goes into a senior care facility and doesn’t want the government to take the family home as payment for medical bills or housing.
There are limits on how this instrument can be used and in the timing of it as well. Each state has its own laws that govern these details. In most cases it can’t be used when a property is being sold, but must have already been in place for a period of time.
It is usually the case that you will still be liable for the mortgage loan even if you quit claim your property to someone else. The lender will need to be informed of your intent. The best way to quit claim with a mortgage still owed is to have the grantee, or recipient, take out a loan on the balance of the mortgage in his or her name.
If you wish to quit claim your property because you are in financial difficulty you can do so as long as someone will pay for the property in the end. You can always sell to an investor for quick cash, especially if you have existing equity in the house.