House Title Transfer

What is a House Title?

A house title is a legal right to homeownership. It designates a property’s ownership, including the legal right of a person to occupy, live in, rent, or sell it. This document is also essential in learning about the property’s history. A title search allows a person to review a property’s sale and mortgage history and determine if there are any title issues. 

Types of House Titles

House title types determine the ownership agreement of a property. Here are the different ways in which a property owner can hold a real estate title:

• Sole Ownership: Sole ownership involves a single person or entity holding the real estate title. This is the only person with rights.
• Joint Tenancy: In a joint tenancy, two or more people hold the title to a real estate asset or property. Each partner has equal rights to the property, including the right to pass ownership through a right of survivorship.
• Tenancy in Common: In a tenancy in a common title agreement, two or more people have ownership rights. However, unlike a joint tenancy, each owner holds individual title rights to their share of the property.
• Tenancy by Entirety: A tenancy by entirety agreement is reserved for married couples who own property together. Title ownership in tenancy by entirety considers the married couple a single entity, with each spouse having equal rights.

The House Title Transfer Process

Real estate title transfers are essential when selling or buying a house. The current owner must transfer the title to the new owners by signing the deed.

Key Steps in a Title Transfer

Transferring property via the title involves a series of steps, including the following:

• Signed Offer: Before the seller transfers the property, each party must agree on the price and selling terms.
• Title Search and Examination: A title search and examination is a process in which a professional reviews legal documents to ensure the seller has the right to sell. A title review also involves searching for liens or ownership disputes.
• Escrow: The property deed is then placed in escrow until the conditions of the real estate sale are met.
• Sign and Record the Deed: Property transfer officially occurs once the deed is signed and recorded. This step may involve a licensed notary public.

Depending on the reason for transferring or the complexities of the deed, some sellers or buyers may want to hire a real estate attorney for this process. Some buyers may also consider title insurance, which protects them financially if a dispute of ownership should arise later.

The Role of Escrow

Escrow involves using a third-party provider to hold assets and transfer documents, such as property titles. The escrow agent holds the assets until all parties fulfill their contractual requirements. If the title search finds any liens or disputes, the title company will keep the deed in escrow until resolved.

Recording the Deed

A property deed transfer isn’t complete until it is officially recorded. Property owners can record the property deed transfer at their local county recorder’s office.

Common Scenarios When Transferring Property Ownership

Transferring ownership of a property doesn’t always go smoothly. These are the most common situations where transfer property ownership may occur.

Buying and Selling a House

Selling or buying a house involves transferring the property’s title. In a home sale, the seller signs over the real estate deed in return for the money earned. It is best practice to work with a title insurance company when transferring real property in a sale. The title company manages all title inspections.

Transferring Title in a Divorce

A property transfer may also occur in a divorce. A quit claim deed is commonly used to transfer ownership in a divorce (learn more about mortgage assumption during divorce), as it efficiently removes one spouse’s rights. 

A quitclaim deed is a legal document that transfers property ownership without general warranty or guarantees. This is compared to a general warranty deed, which guarantees a deed free of liens or disputes.

Inheritance and Probate

A family member may leave property ownership to an heir through an inheritance (find out if there is a time limit on selling inherited property). Probate, a legal process of distributing assets, is sometimes necessary to transfer property. However, probate can be time-consuming and expensive. Certain title types, such as joint tenancy, allow family members to avoid probation.

Gifting a House

A situation in which someone gifts a house to someone else would also involve a transfer of property. A gift deed is similar to any other deed type and has tax implications. However, annual gift tax exclusions can ensure that the new owner doesn’t pay a hefty tax bill.

Capital gains tax and gift taxes may be a concern for some property owners. A transfer tax applies to the transfer of a property, which is calculated based on the property’s value. Working with a real estate attorney to discuss real estate property transfer tax liabilities is best.

Potential Challenges in Property Title Transfers

Transferring a property title has specific requirements, which can sometimes present challenges. Here are a few issues that could arise during property title transfers.

Title Defects and Clouds on Title

Title defects may include liens, unpaid taxes, or ownership disputes. These issues, often referred to as encumbrances, can prolong or prevent the sale and transfer of a property.

Resolving Title Issues

Resolution of title issues is required before the property can be transferred. Working with a title company can help uncover title issues. The title company reviews the title’s history, including previous owners and transfers. The cost of a title insurance company is usually well worth the deed protections.

The deed form determines the level of warranty protection. For example, a general warranty deed offers the maximum protection against title and deed issues. A special warranty deed is also common in property transfers and implies that the title was free and clear at the time of the sale, offering slightly less protection to the new owner.

Selling to a Cash Home Buyer

A cash buyer can make the home-selling process faster and more convenient. Consider getting an instant cash offer for your house to simplify the transaction. Sell your home for a cost based on fair market value on your schedule.

Simplifying the Title Transfer Process

Selling to a cash buyer helps streamline the real estate transaction process. Contract contingencies can slow down the sales process and lead to unexpected costs. Whether you want to move for a new career opportunity or sell a family home, a cash sale offers a less stressful transaction.

Benefits of a Cash Sale to a Property Owner

When you sell to a cash buyer, you can enjoy a more convenient and faster closing process. Skip the repairs or renovations and list your home as-is. Leave the title search and transfer legalities to the buyer. Avoid paying the cost of real estate commissions.

When working with a cash buyer, you also have more control over the closing process, including choosing the closing date that works best for you. A cash buyer helps sellers save money and offload their property on their schedule.

Contact A-List Properties at (972) 526-7042 to discuss your selling options. Use our online form to receive a fast cash offer.