There are several different kinds of deeds that people can use to transfer the ownership of real property from one party to another. The quitclaim deed is arguably the most ubiquitous and well-known of all deeds, but it is also the form of deed that could most easily lead to real estate fraud.
As someone hoping to purchase a property, you need to take steps to protect yourself and the investment you are about to make. Especially if the seller has indicated their intent to transfer ownership via quitclaim deed, research on your end is particularly important.
How do people use quitclaim deeds to commit fraud?
As the name implies, when an individual executes a quitclaim deed, they effectively transfer their ownership interest in a property to another person by quitting their claim on the property. However, people who don’t own a property can still execute a quitclaim deed for that property.
Nothing precludes someone from drawing up a quitclaim deed for Buckingham Palace. They may have 0% ownership interest, but they can certainly transfer that nonexistent interest to someone else. The most common way to protect yourself from quitclaim deed fraud is to purchase title insurance on a property.
However, if you intend to forgo title insurance, possibly to keep costs low for a cash purchase, you can inquire with the county recorder. There are documents available that can verify who actually holds title to the property. If the name does not match the person selling the property, paying for title insurance or continuing your search may be your best option. These are some reasons why an experienced real estate attorney can be so helpful when buying or selling property.