What's the best way to add a person to the title in a short sale?

Question

We are closing in a week for a short sale. The current PA is only in my husband's name, however we want to add our business partner's name to the title. And it is a cash purchase. Can anybody suggest a good way to add our business partner's name to the deed during closing? Or should we change the title after closing? Would that cause tax consequences? The property is a rental property. To make matters worse, the business partner is a foreigner and not living in US.

Any suggestions? Thanks a lot!

Wayne Brooks · Answer

You won't be able to do it prior to, or during, closing as the Approval Letter is buyer specific and the title co. must follow that.

Steven Hamilton II · Answer

No tax ramifications if its done the same day to add them to title.  Prepare the QC at the closing and have it signed right away to give them comfort.

Wendy BK · Answer

Thanks everyone.  I asked the title  company. Seems the solution is to have a quit claim deed to add the partner. And add endorsement to the title insurance so everyone can be covered by the title insurance.

Anybody knows if there would be any tax consequences here? I know I should talk to a CPA, but just wonder if anyone has similar experiences before.

Thanks!

James Sinclair · Answer

Since, as you stated, it is a cash sale and no mortgage is involved I would check with the title company.  It looks like it would be simular to an asignment of contract with a partial interest being assigned.

Simon Campbell · Answer

Perhaps the easiest solution will be to record a Quit Claim deed that relinquishes a percentage of ownership from the original purchases and assigns it to your business partner. Make sure you state the percentage of ownership.

If you have a mortgage attached to this property - then you are going to have problems. You need to consult your loan officer to see how to work that out.

As to the tax ramifications, you may want to consult a CPA to make sure that the answer is correct and that it is handled in a way that will benefit all parties.

What's the best way to add a person to the title in a short sale?

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