When Does Ownership Transfer by Edith Lank on Creators.com

Recently

Title and Deed Dear Edith: My husband and I recently paid off our home mortgage. Only my name is on the deed. I would like both of our names to appear on the title to the house, so that in the event of my death, my husband would clearly have ownership of the …Read more. Making Lots on the Sale Dear Mrs. Lank: I've lived in my house for 32 years and want to sell this year. I am widowed and understand that I will have $250,000 that will not be taxed from the proceeds. Am I required to pay capital gains on a portion of the remaining monies? …Read more. Can't Kick Tenants Out Mrs. Lank: I am interested in buying a condo that is currently rented out. The seller says that the lease isn't up until for seven months and therefore I couldn't move in until then. If I bought this condo, would I be forced to become a landlord? Or …Read more. Did He Overpay? Dear Edith: I bought a house this summer, and in light of the National Association of Realtors' admission that they've been overstating home sales since 2007, I'm wondering if that faulty data may have made me overpay for my house. — L. Answer:…Read more.

When Does Ownership Transfer

Edith: When it comes to deeds of conveyance, is the property officially transferred on the date when the deed is signed or when the deed is filed? I have always been confused about which is the official date of ownership. — K.R.

Answer: You really should get a lawyer to explain this, but my understanding is that ownership transfers when the deed is "signed, sealed and delivered," which might not be either of the dates you mention.

I'm not sure "sealed" means much these days, but I know the deed must be signed by the grantor (the old owner) and "delivered" — actually accepted by the grantee, or the new owner. If grandma signs a deed giving her house to her grandson, but she doesn't tell him and hides it under her bed, ownership hasn't transferred and the house is still in her estate.

Way back when few people were literate, seller, buyer and witnesses would walk the boundaries of the property. Then the seller would pick up a clod of earth, which symbolized the whole parcel, and hand it to the buyer. At the moment when the new owner seized the lump of earth, ownership transferred. That's why at a closing, someone may hand a deed to the confused buyer, and then immediately take it away to be entered in the public records.

The buyer receives title at that moment "as between the parties," but the world at large doesn't know about it yet. The previous owner might sell the same place to three other unsuspecting persons the next day, take all the money and fly off to Brazil. That's why the deed should be promptly entered in the public records. Other potential buyers would make a last-minute search of the records, just to be safe, before handing over their money.

The notary's signature on a deed doesn't transfer ownership. It serves simply as an official witness to the seller's signature. Come to think of it, perhaps that's the modern equivalent of a seal. At any rate, it's required before a deed will be accepted for public recording.

FOR SALE BY OWNER

Dear Edith: My listing is about to expire. A few days ago, I was approached directly by a potential buyer. I referred the buyer to my agent per our agreement.

But I was already considering not listing again and going for sale by owner.

If that buyer does not contact my agent but contacts me after my listing expires, will I be obligated to pay a commission if a sale ensues? — G.D.

Answer: I don't know what your listing contract says about sales after the listing expires. A typical contract might say you owed a commission if the buyer first inspected the property while it was listed and then bought within a specific length of time after the listing expired. But again, I don't know what your particular contract says. Take a look.

TOOK A LIABILITY

Dear Ms. Lank: I am recently divorced. I need to refinance in order to get everything in my name only. What happens if I don't get approved by the mortgage lender?

I've also considered selling the condo. I don't think I will be able to afford the monthly payments in the long run. I owe about 20-30K more than it's worth. What are my options? — e-mail

Answer: If you can't afford the current payments, it isn't likely you'll qualify for new financing.

I don't understand why you agreed to take on the condo. You didn't receive an asset, but a liability of about $25,000. And why would you now want to put that burden entirely into your own name?

I'm afraid I don't see any good options. I suspect both your credit rating and your ex's may take a bad hit before too long. About all I can offer you is sympathy.

SHORT SALE VERSUS FORECLOSURE

Dear Edith: I'm trying to sell my property as a short sale. The tenants don't want to let agents and buyers inside. What are my rights? Also, for credit score and financial concerns, what is the difference between a short sale and a foreclosure? — M.R.K.

Answer: If your tenants have a lease, that should state your right to enter the property. Usually, you must be allowed to show the house with reasonable advance notice. And if there's no lease, that should be the case.

You can have a short sale only if your lender agrees to accept whatever you can get on the open market and (usually but not always) forgive the rest of the debt. With a foreclosure you might — rarely — be held responsible for whatever amount the public auction sale didn't pay off. You could end up with a deficiency judgment for the rest.

Neither is all that great for your credit record, but the short sale scores somewhat better than a foreclosure.

Edith Lank will respond personally to any questions sent to her at 240 Hemingway Drive, Rochester, NY 14620 (please include a stamped return envelope), or readers may e-mail her at ehlank@aol.com.