Holding Title on Your New Home: What You Need to Know

Holding Title on Your New Home: What You Need to Know

If you are in the process of buying a new home, you will likely soon run into the concept of holding title on your property. In real estate, a title is required to show ownership of the land and home. After a sale, the title must be transferred, usually without any holds or liens, to the new owner. Because a home is such a large sale, there are several different titles available depending on your situation.  Working with seasoned experts at Escrow World to guide you will take all the anxiety and confusion out of the process. Let’s take a look at the most common ways to hold title on your new property.

Joint Tenancy
This title is held between two or more people who have equal rights to the property. Joint tenancy may or may not be between related or married partners. This titling requires that all parties agree on any financing and that arrangements are made for dividing the ownership in the event of death or sale. All parties are responsible financially for the property.

Tenancy in Common
Like joint tenancy, tenancy in common occurs when two or more people own a property but ownership can be divided into any number of interests, equal or unequal. However, the rights are held individually and can be willed to other parties and transferred undivided. Parties can use their portion of the property as collateral and creditors can only place liens against the faulting party’s portion of the property.

Community Property with Rights of Survivorship
This type of tenancy occurs between married owners. The couple is considered one person for legal purposes. If one tenant dies, the property is automatically transferred in whole to the remaining partner. This form requires less legal action in death and no need for a will or other documentation. Tenancy by entirety prohibits dividing the property, so if the owners divorce, the title will be transferred to a tenancy in common.

Community Property
This type of ownership is taken on by a married couple or domestic partners with the intention that the two will own the property together. Either party can do what they wish with their half of the property. Any real estate holdings acquired during a common-law marriage are typically considered community property.

Sole Ownership
This occurs when one individual holds the title entirely. This type of title makes transactions and transfers quite easy and smooth, but can be a problem if the owner dies or is incapacitated. A will should be kept to outline proper ownership in this event.

As you can see, there are several different ways to structure your title. Your choice will depend on your personal situation and future plans for your real estate investment. Consider what you want to happen to the property in the case of accident or death and make necessary arrangements. Discuss your options with your real estate agent to make the best choice for titling your new home.

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