Purpose Of "Closing Costs"
The other day, i was negotiating a price on a house ( as a bird dog), trying to get it under contract so i could flip it to one of my investors.
I told the guy, that my investor would pay all closing costs. The guy said "so what, there wont be any closing costs, ill just quit claim deed him the property"
I told him that "if there is a sale, there will be closing costs, the state of florida wants their share".
After i left, I got to thinking about it, and wasnt sure that I was right.
I hear of people quit claim deeding property all the time. Can someone explain to me : In what situations is quit claim deeding a property in order versus going through a closing and paying closing costs?
You cant just quitclaim the property unless he owns it free and clear. Or if he has a mortgage and he deeds it over the guy is taking it sub2. Which is a whole different ballgame.
in this particular case, the person does own it free and clear... in that case, could he quit claim deed it to my investor and my investor in turn wire him the money (or vice versa) and not have to pay closing costs? Closing costs in Florida can be quite expensive compared to other states ( so someone has told me, I really dont know how other states compare)
A common definition of the quit claim deed - QUITCLAIM DEED - A deed that transfers the owner's interest to a buyer but does not guarantee that there are no other claims against the property.
In other words, when a Grantor quit claims a property, the Grantor is making no guarantee or promises that the property is free of debt or s/he is making no promises that no one else claims to own the property. The quit claim deed just says the Grantor is signing over whatever ownership interest he or she may have in the property. Quitclaim deeds are also used to clear up questions of full title when a person has a possible but unknown interest in the property.
Often, divorcing spouses use quit claim deeds where one spouse quits (gives up) their rights to the property. One is essentially giving all the rights and “Grantor Powers” to the other spouse.
Grant deeds and warranty deeds guarantee (warrant) that the Grantor has full title and guarantees that they own a clear title, which can be transferred (conveyed). quitclaim deeds do not warrant good title.
I am beginning to see a lot of confusion and “all the way not correct” information about the use of different deeds.
Unless the price you were negotiating is $0.00 there would still be transfer taxes due. And a recording fee even if the price is $0. Not big money but yes, there would be some closing costs.
thanks guys, that helps me out a lot