What are the most common ways to transfer ownership of my home?
Transferring ownership of a property requires a deed. A deed is a legal document that moves the property from one owner to the next, effectively changing the property title to reflect a new owner. It is intended to:
- Identify the buyer and the seller.
- Set the purchase price (in some cases to calculate transfer tax).
- Establish the legal description of the property.
- Describe the effective date of the transfer.
The current owner of the property is required to sign the deed in front of a notary public. The buyer or the person receiving the property is not required to sign it.
The type of deed to use varies based on the reason the seller is transferring real estate. See below for some specific types of deeds used to transfer property.
- Warranty Deed: A Warranty Deed (sometimes called a General Warranty Deed) establishes that the current property owner guarantees the property is free and clear of any debts or liens and that the seller holds good title to the property. If anyone challenges ownership or asserts a lien, then the seller is required to indemnify or defend the title to the property.
- Special Warranty Deed: A Special Warranty Deed is similar to a General Warranty Deed except that it limits the warranty to only the time that the seller held the property. It assures the buyer that the seller has done nothing to create a defect, but it does not extend the guarantee beyond the period that the seller held the property.
- Grant Deed: A Grant Deed guarantees that the property is not subject to any liens or other financial obligations, and that the seller holds current rights to the property and will not transfer it to someone else. It is more common for transfers between individuals, including gift transfers.
- Quitclaim Deed: A Quitclaim Deed is used to transfer whatever rights someone has to a property. It makes no guarantee or assurance that the person transferring the property actually owns the real estate — so if a person has no rights to the property, they would transfer no rights. A Quitclaim Deed also says nothing about liens or mortgages against the property.
Which type of deed is most commonly used after a sale?
Generally, the seller of a residential home provides the buyer with a Warranty Deed. This type of deed is perhaps the “best” type of deed that a buyer can obtain because it comes with a warranty from the seller.
Which type of deed is used when passing ownership after death?
In general, if a property is going to be transferred after someone passes away, a court is required to approve the transfer unless the property is in a trust or has other special provisions tied to it.
In some states, there is a special type of deed called a Beneficiary Deed, or Transfer on Death Deed, that allows the property to immediately pass to another person (such as a family member or other beneficiaries) without having to put the real property through probate. This type of deed is a helpful estate planning tool because it makes the entire transfer much faster and does not require involving the court to approve the transaction.
Which type of deed is used for transferring a condo?
The transfer of a condo from one person to another follows the same basic path as any other type of real property. This means that whatever property deed or deed form would be appropriate for transferring real estate would also work for the condo — usually, that is a General Warranty Deed if the condo is being transferred outright.
Transferring a condo to a new owner involves all of the same ownership rights and responsibilities to the property as if you were transferring a standalone residential property. The only meaningful difference is that you may run into problems with the Homeowners Association (HOA).
For instance, if you are behind on HOA dues, you may be required to catch up with those payments before you sell the property. There might also be notice requirements before you are able to transfer your property. In some agreements, the HOA can outright deny a real estate transaction for any reason, so it is important to read any HOA agreements carefully. You can contact a Rocket Lawyer network attorney if you have questions.
How do I add a family member or spouse as an owner of my home?
Adding a spouse or another family member to a property is a relatively simple process. The single owner of the property is required to use a deed to transfer the property to both themselves and the person they want to add to the property ownership.
However, the process becomes more complicated if you have a mortgage on the property. Most mortgage companies or other lenders do not allow you to transfer the property as that would constitute a change in the terms of the mortgage. To add another owner, you would likely be required to refinance the property to adjust the terms, which may include adding the new owner to the mortgage responsibilities as well.
There might also be tax consequences for transferring the property to a family member. For example, by adding someone’s name to a property, you are essentially gifting them a portion of the property’s value. That gift typically triggers a gift tax obligation. There may be property tax consequences as well. Before making this type of transfer, you may want to speak with a real estate lawyer to consider all of the potential consequences.
Am I required to create a new deed to transfer my home or real estate to my trust?
Yes, a new deed is required to transfer property into a trust. On the deed transfer, be sure to include your name individually (and any joint owners) as the grantor and the trustee as the grantee. After filling out the deed, file it in the county recorder’s office in the county in which the property is located. Once filed, the deed describing the transfer of real estate becomes a part of the public record in that county.
You can usually use either a Quitclaim Deed or Warranty Deed to accomplish this goal. A Quitclaim Deed is faster because it does not involve looking back at the history of the property to ensure a clear title, but this level of investigation may be worth it in the long run.
Transferring property on your own is certainly possible, whether it is for estate planning purposes or simply to sell the real estate property to a third party. However, you may be able to protect yourself and avoid unforeseen consequences by consulting with a lawyer for legal advice before the transfer. A good place to start is reaching out to a Rocket Lawyer network attorney.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.
