The way you hold title to your house determines your ownership rights. The title information identifies whether you are the sole owner or share ownership with others. This directly affects your right to sell your ownership percentage or to pass on your ownership share to a beneficiary when you die. If you pay cash for your house, the title can transfer to you when you close.
Ways to Hold Title
Your property title tells how you own the property. The most common way to hold title is through sole ownership. This gives you exclusive ownership rights to the house. Married couples often hold title in some states as "tenants by the entirety," which allows a surviving spouse to gain sole title. There are two ways to hold title if the house is owned with at least one other person who is not your spouse. Under "joint tenancy with right of survivorship," ownership is equally divided among the owners. Upon your death, your ownership share is equally divided among the remaining owners. With a "tenancy in common," ownership does not have to be equally divided, and you can leave your share of the property after your death to anyone you choose.
Property Title Search
Whether you pay cash for your house or get a mortgage loan, the person or company conducting the closing, such as an attorney or a title company, will perform a title search. A title search uses public records to establish a clear chain of ownership. Each previous owner is listed along with the dates of their ownership. The title search also turns up any encumbrances, such as unpaid property taxes, judgments or liens. Depending on state law, either you or the current owner must pay these items off before the closing date.
The person or the title company conducting the closing prepares a deed, which transfers title of the property from the current owner to you. The title information is included on the deed. The deed is proof that you have legal title to the property. It identifies how you’re holding title, such as a husband and wife holding the property as tenants in the entirety. The deed recites the legal description of the property and may contain the property identification number. The deed lists any restrictions on how the property is used and what type of structure can be built.
Receiving Title Transfer at Closing
When you pay cash for your house, you can usually get the deed transferring your title rights the same day that you close. First, you and the seller must sign the closing documents. After that, the sales proceeds are disbursed. If your closing takes place in the morning or early afternoon, the deed can be brought to the county court house and recorded in the public records. In that case, you can leave the closing with the transferred title in hand. If the closing takes place in the late afternoon or evening, you’ll have to wait for the following business day to get your recorded deed.
Based in St. Petersburg, Fla., Karen Rogers covers the financial markets for several online publications. She received a bachelor's degree in business administration from the University of South Florida.