Quit Claim Deeds in Texas - Do It Yourself?

Question

Hi everyone, I will be transferring a property from an LLC (I own) into my personal name. Yes, the opposite of what most investors do. There is no note on the property, so no issues with "due on sale" clause. I called the Travis County recording office and they said there is no form or template provided by the County. A quick search online turns up dozens of simple quit claim deed templates. So, my question is whether any Texas investors out there have done this themselves, used a service such as LegalZoom or hired an attorney. Many thanks in advance for the insights.

Alex G. · Answer

QCDs are popular in California and some other states. In Texas most title companies frown on quit claim deeds, so not a good idea. Use Warranty Deed and you’ll save yourself some trouble ahead. It’s a 1-2 page doc that needs to be notarized and filed and must include accurate full legal description to convey the right property. I had a fews purchase situations where we had to look for past signors of QCDs and have them sign a Warranty Deed to get title company to accept the transfer.

Probably the cheapest way to get a professional grade WD doc is to call your favorite title co and ask them to prepare one for you. They have them on file. They usually charge around $100 for it, less than most lawyers would. You can ask them to give you the MS Word file so you can use it in other transactions later on.

Kevin Sobilo · Answer

The document prep for a deed in my are is $100-200. I don't think I would spend any time trying to save that. Beyond that you just have the costs to record it which exist whether you use a lawyer or not. So, even though I'm sure I could do it myself, I don't think its time well spent.

Also, I actually value having an established relationship with a real estate law office. They will answer detailed questions for me for free and give great advice. So, when there is actual work to hire them for I want to do that. They need to make their money to be in business for when I need them.

Some things such as basic evictions, small claims court etc I will do myself but mainly because those things come up more than once and would be more expensive. So, its worth my while to become proficient. I would not write deeds, do quiet title actions, etc on my own.

Mitchell Zoll · Answer

Chris - the answers above are correct. In Texas, a quitclaim deed conveys only the grantor's rights, if any, in the real property. A quitclaim deed contains no warranties of any kind and does not establish title in the person holding the deed.  It says "I'm not saying I own it, but if I do, you can have what I own."  I can quit claim the pennybacker bridge to you if you would like (for a fee of course!) To preserve title, get someone to draft you a deed that conveys the property in a way the title company will support in the future. It is simple and you can electronically record it to convey title from your LLC back to you.

Bruce Lynn · Answer

Never use Quit Claims in Texas.   As explained to me, they don't establish ownership, all they do is extinguish any claim by the previous owner.

Get a title attorney to prepare you a warrant deed or a special warranty deed and then you can file on your own.

You don't need Legal Zoom or some online form.....keep yourself out of trouble and from creating issues for yourself in the future.

I'll bet you can get someone local who knows the laws and can do it correctly for you for $100-$150 and then filing fee might be another $35 or so in Travis County.

Costin I. · Answer

@Chris Schorre - Be careful when choosing to use a Quit Claim Deed:A person receiving a purported real estate interest via a quitclaim deed may receive no legal right to the property whatsoever. If the person seeking to transfer real estate with a quitclaim deed has no legal interest, nothing legally is conveyed. In the absence of title insurance--which is not available for a quitclaim deed--the person receiving the quitclaim deed has no legal recourse because the deed itself states that only the interest of the grantor, if any interest exists, is conveyed.Whether title insurance terminates by transferring real property depends on the type of policy, and how “insured” is defined in the policy. You take a risk which could result in cancellation of your title insurance and complete loss of your real property without compensation in the event that a title issue regarding your real property arises.Contact your title insurance company to determine coverage and if your policy does cover transfers , and when or how.https://www.biggerpockets.com/...

Another reason, from the mouth of the "expert" Clint Coons himself -  go to YouTube and search for "clint coons when You Shouldn't Use A Quit Claim Deed".

Peter Walther · Answer

I just checked Stewart Title's online underwriting manual and ironically they have a Texas Quit Claim Deed form in the forms section and I couldn't find a bulletin prohibiting insuring title because of one in the chain.

TX Deed-Quitclaim 1 (virtualunderwriter.com)

Peter Walther · Answer

Several of the title underwriters I work for wrote policies in TX.  In my career I handled multiple claims based on policies insuring title in TX including the one discussed in the case found at the link below which you might find interesting.

I've had long involved conversations with TX underwriters with both individuals who worked for underwriters that I did not and underwriters who did, and never did I have anyone tell me their company had a blanket prohibition on insuring title because the seller had received title via a QCD or that there is a QCD in the chain of title.

As I wrote above, an underwriter might have additional questions if a QCD is in the chain, particularly if it is recent, but never has anyone I know of said QCDs are uninsurable per se.  Title may be uninsurable because of the answers to the questions i.e., the deed is a forgery, the grantor was incompetent etc.

If anyone reading this post or anyone you know, has something in writing (a letter from an underwriter, an article discussing a prohibition, an underwriting bulletin) discussing a prohibition I'd would like to read it.

SIDES v. SALIGA | No. 03-17-00732-CV. | By JEFF ROSE | 20190620745 | Leagle.com

Greg H. · Answer

@Peter Walther

So the op was inquiring from Texas. To be clear, there is no law negating a quit claim deed or the use of in Texas. However, very few title companies these days are willing to issue title insurance on the transaction unless it is an internal transfer such as a transfer to an ex-spouse. So the debate as to how good/bad a QCD is legally it is moot if one can’t transfer title with title insurance. Of course one could find a buyer to accept that but that pool Is very very limited

USDA used to only convey their foreclosed sales by quit claim. I was able to get my title company to issue title insurance as I was a good customer and was flipping so they received 2 premiums

Peter Walther · Answer

I also believe you may be able to sue a QCG grantor for fraud if title is not as represented, depending on the facts of the situation.

Quit Claim Deeds in Texas - Do It Yourself?

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