Posted on: 11th Nov, 2007 06:49 am
i have been trying to sell my condo for about a year with no luck. at this point i am ready to just be finished with it and would be willing to sell for what i owe. i found a potential buyer who asked if i would be willing to do a quit claim deed on the property, but i am still a bit confused about how it could possibly negatively affect me and my credit. if i signed a quit claim does that mean that i no longer have any responsibility to the property and that the remaining mortgage balance would no longer be in my name? what are the financial risks associated with this type of transaction?
Hi Sarah,
Welcome to the forums.
If you quitclaim your property to someone, it doesn't mean that it will affect your credit profile. As far as I understand, you wish to sell the property and in the process you need to change the ownership of your property from you to the buyer. This is why you need a quitclaim deed. Know more....
Now, if you are able to sell the property at a price below the unpaid debt, then that's a short sale an it will affect your credit score. I guess this is why you've heard somewhere that the sale can affect your credit. But it's the quitclaim that's not going to affect you in any way.
However, a quitclaim doesn't become effective in transferring the unpaid debt. When you sell the home, you get some proceeds and with that you need to pay off the debt.
There's isn't any financial risks when you sell the home and sign on a quitclaim deed for a change in the title (had it not been a sale but a mere quitclaim, you would have to pay gift tax, if required).
However, if you sell the home with some gains then there's the capital gains tax that you've to pay. But since your home is on the market for a year with no luck, I guess the market isn't doing well, so better if you don't expect any gains from the sale.
Take Care
Welcome to the forums.
If you quitclaim your property to someone, it doesn't mean that it will affect your credit profile. As far as I understand, you wish to sell the property and in the process you need to change the ownership of your property from you to the buyer. This is why you need a quitclaim deed. Know more....
Now, if you are able to sell the property at a price below the unpaid debt, then that's a short sale an it will affect your credit score. I guess this is why you've heard somewhere that the sale can affect your credit. But it's the quitclaim that's not going to affect you in any way.
However, a quitclaim doesn't become effective in transferring the unpaid debt. When you sell the home, you get some proceeds and with that you need to pay off the debt.
There's isn't any financial risks when you sell the home and sign on a quitclaim deed for a change in the title (had it not been a sale but a mere quitclaim, you would have to pay gift tax, if required).
However, if you sell the home with some gains then there's the capital gains tax that you've to pay. But since your home is on the market for a year with no luck, I guess the market isn't doing well, so better if you don't expect any gains from the sale.
Take Care
Hello Sarah,
In order to transfer the ownership of the property you have to sign either a quit claim deed or a warranty deed during the sale of the property.
In case of a sale, buyers mostly prefer a warranty deed because this guarantees a clear title with no liens attached to the property.
In order to transfer the ownership of the property you have to sign either a quit claim deed or a warranty deed during the sale of the property.
In case of a sale, buyers mostly prefer a warranty deed because this guarantees a clear title with no liens attached to the property.
I think Sarah's buyer is asking her to just quit claim her interest over to them...that's the way I interpreted the question. Be careful, Sarah...if you quit claim the property over to this person, then they will own your house, but you will still have to pay the mortgage.
If this person is asking for you to do owner financing or a lease purchase...that is another option, but again, you do not quit claim interest...like Jenkin 7 said...in a sale, it will be a warranty deed, and that is not done until the buyer arranges for a loan to purchase the property.
Hope this helps!
Kim
If this person is asking for you to do owner financing or a lease purchase...that is another option, but again, you do not quit claim interest...like Jenkin 7 said...in a sale, it will be a warranty deed, and that is not done until the buyer arranges for a loan to purchase the property.
Hope this helps!
Kim
