Real estate is a constantly evolving industry, with various changes in ownership structures occurring regularly. These changes in vesting, or how a property is owned, can have significant implications for estate planning, taxes, and property sales. As a residential real estate agent or investor, it is essential to understand the various types of vesting changes and what they could indicate for a property’s future sale. In this blog, we’ll explore the top 10 most common changes in vesting and why they matter.

 

• Change from Joint Tenancy to Tenancy in Common A change in ownership from joint tenancy to tenancy in common is a common indicator that one of the owners wants to sell their share of the property. Joint tenancy is an ownership structure where two or more individuals own the property equally, and if one owner dies, their share automatically passes to the surviving owner(s) without going through probate. Tenancy in common, on the other hand, is where two or more individuals own the property, but each owner has a specified percentage of ownership. Upon the death of an owner, their share of the property is passed on to their heirs as stipulated in their will or through probate. If one of the owners in a joint tenancy changes the ownership structure to tenancy in common, it could indicate that they plan to sell their share of the property.
  • Joint Tenancy – When two or more individuals own a property with equal shares and the right of survivorship.
  • Tenancy in Common – When two or more individuals own a property with unequal shares and no right of survivorship.

 

• Transfer from a Trust to an Individual Owner A transfer of ownership from a trust to an individual owner could indicate that the beneficiaries of the trust have decided to sell the property. A trust is a legal arrangement where a trustee manages the property on behalf of the beneficiaries. If the property is transferred from the trust to an individual owner, it could indicate that the beneficiaries have decided to sell the property.
  • Trust – When a property is held by a trustee for the benefit of the trust’s beneficiaries.
  • Sole Ownership – When a property is owned by a single individual.

 

• Transfer of Ownership to a Real Estate Investor or Developer If the property is transferred to a real estate investor or developer, it could indicate that they plan to renovate or develop the property for resale. Real estate investors and developers often purchase properties to renovate and sell for a profit.
  • Partnership – When two or more individuals own a property for business purposes.
  • LLC – Limited Liability Company, a legal entity that can own and manage a property.

 

• Addition of a Co-Owner If a new co-owner is added to the title, it could indicate that they are buying into the property to become a part owner, and a sale may be part of the plan. Adding a new co-owner can help finance or manage the property, and a sale may be part of the plan to realize the added value of the property.
  • Co-ownership – When two or more individuals own a property with different percentages of ownership.

 

• Change from Sole Ownership to Joint Tenancy or Tenancy in Common A change from sole ownership to joint tenancy or tenancy in common could indicate that the owner wants to bring on new co-owners to help finance or manage the property, and a sale may be part of the plan. Adding co-owners can help spread the risk of ownership and make it easier to manage the property.
  • Joint Tenancy – When two or more individuals own a property with equal shares and the right of survivorship.
  • Tenancy in Common – When two or more individuals own a property with unequal shares and no right of survivorship.

 

• Transfer of Ownership from an Estate to Heirs If the property was part of an estate and is transferred to the heirs, it could indicate that they plan to sell the property. The transfer of ownership from an estate to heirs often occurs after the death of the owner, and the heirs may decide to sell the property.
  • Probate – When a property is being transferred to a beneficiary as part of the probate process after the owner’s death.

 

• Transfer of Ownership Due to Divorce If the property is transferred from one spouse to another as part of a divorce settlement, it could indicate that one of the spouses plans to sell the property. Divorce settlements often involve the transfer of assets, including real estate properties, and a sale may be part of the plan to divide the assets fairly.
  • Joint Tenancy – When two or more individuals own a property with equal shares and the right of survivorship.
  • Sole Ownership – When a property is owned by a single individual.

 

• Transfer of Ownership Due to Bankruptcy If the property is transferred as part of a bankruptcy settlement, it could indicate that the owner plans to sell the property to settle their debts. Bankruptcy settlements often involve the sale of assets, including real estate properties, to pay off creditors.
  • Bankruptcy – When a property is being sold to pay off creditors as part of a bankruptcy settlement.

 

• Change in Ownership Percentage A change in ownership percentage could indicate that one of the co-owners wants to sell their share of the property. If one of the co-owners increases their ownership percentage, it could indicate that they plan to buy out the other co-owners and sell the property.
  • Co-ownership – When two or more individuals own a property with different percentages of ownership.

 

• Transfer of Ownership to a Family Member If the property is transferred to a family member, it could indicate that the owner wants to keep the property in the family or that the family member plans to sell the property. The transfer of ownership to a family member can have various reasons, including estate planning, tax purposes, or sentimental reasons.
  • Transfer to Family Member – When a property is transferred to a family member for various reasons, such as estate planning or tax purposes.

 

Understanding the various changes in vesting is crucial for residential real estate agents and investors. These changes can indicate a property’s future sale and can help agents and investors make informed decisions about their investments. However, tracking these changes manually can be time-consuming and prone to errors. That’s why solutions like the REfresh Engine by Likely.AI can be invaluable for real estate professionals. This AI-powered tool monitors properties’ ownership changes, prediction scores, market status, equity changes and alerts users of any changes including vesting that could indicate an upcoming sale. By using such tools, real estate agents and investors can stay ahead of the competition and make informed investment decisions.

 

In conclusion, changes in vesting can have significant implications for property sales. Understanding the various changes and what they could indicate is crucial for residential real estate agents and investors. By monitoring these changes using advanced AI-powered tools like the REfresh Engine by Likely.AI, real estate agents, brokers and investors can stay on top of market trends and make informed real estate decisions.