What exactly is a "quit claim" and how does it work?

Question

My neighbor (and good friend) couldn't afford his house anymore and he just up and left! Is it possible for me to pay him say $10,000 and have him quit claim it to me? Would this be a solution for him and would this benefit me? House is in good area and worth at least $200,000.

Answer 1

A quit claim deed transfers rights, not obligations.  Transferring the property does not remove liens (mortgage, unpaid taxes, etc.), so you cannot sell it to anyone sensible without paying off the liens.  The property could still be foreclosed, leaving you with nothing.  And most mortgages are immediately due and payable if collateral for the loan is transferred, so that could happen quickly.

Anyone can give you a quit claim deed for anything, but if they have no rights to give you, it is a worthless piece of paper.

Answer 2

He can't really just sign the house over to you if he owes on it.  The bank will foreclose on it if he owes them and stops paying his mortgage.  It can't be just given to you.  A quit claim is a transfer of deed. He would take his name off of the deed and put your name on it, transferring ownership to you.  The problem is, as I stated above, if he has a mortgage on it, he doesn't actually "own" the property to sign it over to you.  

Answer 3

A "quit claim" deed says that he is selling (or giving) you all rights he MIGHT have in the house. This often used when there is some question as to ownership (ex spouse, step children, children born after the will was made). Usually the money is less than $100.

Yes, he could sell your a "quit claim", however, the bank likely has a due-on-sale clause in the loan. That you would need to pay quickly or they would foreclose. Likely their lien on the house is for more than the house is worth if the guy is willing to walk away from it. He might ask them if he can do a "short" sale (selling the house for less than the loan) to you. If the bank would go along with this, it might be best for everyone involved.

Answer 4

NO!!!

Your neighbor can't simply quitclaim his property to you.  A quit claim deed is a document that relinquishes an owners rights of ownership to another WHO IS ALREADY ON TITLE TO THE PROPERTY.  A quitclaim is often used in a divorce when both husband and wife are on title for the sake of a property settlement (to avoid selling the property).

In order for you to get the property you would need to pay off his mortgage since a property can't be retitled until all liens have been released (a mortgage is a lien).