The first legal question that has to be answered is the legal nature of a domain name? Is it a thing that can be owned, sold, leased and destroyed? Or is it a service that is performed on the basis of a contract between the user and sponsor? Some sources refer to domain name as a real estate in cyberspace, this is however more allegory than a legal opinion.
The majority of scholars considers the domain name as a legal relationship between the sponsor and a user, where sponsor has the duty to maintain domain name assigned to certain IP address and user has to follow the terms and conditions of registration in a given domain.
However it is not easy to find decisive arguments for one or another approach. You may read through following three articles, one from American, one from Bulgarian and one from Indian author to see that the arguments for domain name approach differ in each legal culture.

http://www.domainhandbook.com/property.html
http://www.wipo.int/edocs/mdocs/ip-conf-bg/en/wipo_ectk_sof_01/wipo_ectk_sof_01_1_6.pdf
http://www.naavi.org/praveen_dalal/pd_domain_name_nov4.htm

Transfer of a domain name

Since the domain name is not a thing it cannot be bought or sold in legal terms even though this terminology is frequent in a language of registrars. The transfer of a domain name can be perceived as an substitution in one party of a contract or as a separate legal institute. Nevertheless the transfer of a name is governed by the rules of the TLD and are more practical question than legal. Please read this simple manual to get general idea of how domain names are transfered.