Understanding Deed and Title Transfer When Selling Your Home in New York

The most fundamental legal event in a real estate transaction is the transfer of ownership – the moment when the property legally ceases to be yours and becomes the buyer's. This transfer happens through the deed, and it is the culmination of everything the title and closing process has been working toward.

What a Deed Is

A deed is a legal document that conveys ownership of real property from one party to another. It identifies the grantor (seller), the grantee (buyer), the property being conveyed (by its legal description), the consideration (purchase price), and the type of title being conveyed.

In New York residential transactions, the most common deed types are:

Full Covenant and Warranty Deed: Provides the most comprehensive protections to the buyer. The seller (grantor) warrants that they have good title to convey, that the title is free from encumbrances except as stated, and that they will defend the buyer against any future claims to the property. This is the standard deed type in most New York residential transactions.

Bargain and Sale Deed with Covenants: Provides somewhat more limited warranties than a full covenant and warranty deed. Common in estate sales and certain other situations where the seller's knowledge of the property's history may be limited.

Bargain and Sale Deed without Covenants: Conveys title with no warranties whatsoever. Used primarily in foreclosure sales and certain fiduciary sales where the seller cannot make representations about the property's history.

Your attorney prepares the appropriate deed type for your specific transaction.

What Title Is and Why It Matters

Title is the legal concept of ownership – the right to possess, use, and transfer real property. "Clear title" means ownership that is free of competing claims, liens, encumbrances, or defects that could challenge the buyer's right of ownership.

The title search, conducted as part of the transaction process, reviews public records to identify everything that has been recorded against the property. This includes: the chain of ownership going back decades; any mortgages or liens that need to be paid at closing; easements that give others specific rights to use portions of the property; restrictions that limit how the property can be used; any judgments or tax liens against the owner; and any open permits or violations that need to be resolved.

The results of the title search determine what actions must be taken before closing – to ensure that what you deliver at closing is the clear, marketable title the contract requires.

Common Title Issues and How They're Resolved

Outstanding mortgage balances: Addressed at closing through the payoff process – the lender receives their payoff amount and issues a satisfaction of mortgage, which is recorded to remove the lien.

Mechanic's liens or judgment liens: Outstanding liens from unpaid contractors or court judgments must be satisfied (paid) or bonded over (a bond posted to protect against the lien) before clear title can be delivered.

Open permits: Work done on the property that was permitted but never received a final inspection and sign-off creates an open permit that clouds title. Open permits must typically be closed – either by completing the required inspections, demonstrating the work was removed, or in some cases filing for dismissal – before closing.

Encroachments: A structure (fence, shed, addition) that crosses a property line can create a title defect. Depending on the nature and significance of the encroachment, resolution may involve obtaining a survey, getting a neighbor's written agreement, or removing the encroaching structure.

The Deed Recording

At or after closing, the deed is recorded in the county clerk's office of the county where the property is located. Recording creates public notice of the ownership transfer and is what officially places the buyer's name in the public records as the new owner.

Until the deed is recorded, the transfer is complete as between the parties but not publicly effective. The title company or your attorney typically handles the recording as part of the closing process.

I work closely with sellers and their attorneys on every title issue that arises during a transaction, ensuring that what needs to be resolved is identified early and handled efficiently on the path to a clean closing. Call me at (321) 447-4259 or visit movewithricky.com.

Rakesh (Ricky) Khanna | Licensed Real Estate Salesperson
Better Homes and Gardens Real Estate Realty Connect
Call or text: (321) 447-4259 | movewithricky.com