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Jin Chen, Real Estate Pro in Mountain View, CA

In an intra-family title transfer situation (parents pass down the title to children), can the title company

Asked by Jin Chen, Mountain View, CA Sun Jun 8, 2008

do this? Or the home owners have to go to the County office to apply for it?

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I would think that the escrow company can do this if it's related to an open escrow and title insurance is purchased. I have never heard of a title company handling transfers of title without the purchase of a title insurance policy since the escrow services are typically just ancillary to the title insurance business. If title insurance is not involved, the only thing the escrow company would do is prepare the deed, notarize the signatures and handle the recording. Like I said, I have never heard of that being done, but would be curious to know whether the escrow department would handle it. I know that they do when someone buys without an agent from a FSBO. If they don't, I would hire a real estate attorney to prepare the deed. The county office will not prepare it for them as that would be like giving legal advice. The county will only record the deed that's already prepared.
As the others have already mentioned, I would also want to make sure that the parents and children receive proper advice concerning any legal consequences of the transfer of title. It would probably also be a good idea to have the property appraised just prior to the transfer just in case the value of the property at the time of the transfer should ever become an issue. I hope this helps. Let us know what you find out from the title/escrow company.
0 votes Thank Flag Link Sun Jun 22, 2008
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
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They should also probably talk to a financial planner (particularly an estate planner) who may recommend setting up a trust and making the children beneficiaries.

Once they decide exactly what is the right thing to do, then the title company should be able to take care of recording the proper deed. (I can't think of any reason for anyone to actually go to the County Recorder's office unless you work in title.)
0 votes Thank Flag Link Mon Jun 9, 2008
I recommend talking to a tax advisor first if you have not already done so. There are limits on how much parents can transfer to the children tax-free each year and it might make sense to do a percentage of the value annually for several years to take advantage of the tax break. Another consideration is the mortgage on the property, if there is one. The parents can transfer a percentage of the property to the kids and keep the mortgage in place, but most mortgages require that the original borrower(s) stay on title (at least in part) until the mortgage is paid off or replaced with a mortgage that the new owners have qualified for. After looking at these two things, I recommend working with a title company to make the transfer.
John
John A Souerbry & Associates
0 votes Thank Flag Link Mon Jun 9, 2008
I would think that either way works, but I would recommend going through the title company so that all the paperwork is completed properly. The county is not going to do a title search nor guarantee clear title to the children.
0 votes Thank Flag Link Sun Jun 8, 2008
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