The Difference Between a Title And a Deed

Any of us can probably think back to a time when there was a word of real estate jargon we couldn’t understand, no matter how hard we tried. It sometimes seems like half of the concepts in the industry are gibberish. 

However, in some cases, it’s crucial to comprehend the jargon, when it comes to buying or selling a home. Without the right information, there’s a risk of making the wrong decisions. Knowledge is power, so today, we’re going to be discussing the difference between a title and a deed. Let’s go! 

What is a title?

A title refers to the ownership of property. When you hold a title to a home, you own the legal rights to it. You have ownership control and responsibility for the home you own a title to. More than one individual can hold titles, like married couples for example. They can also be held by organizations, trusts, partnerships, and corporations. 

When you legally purchase a home, the title is transferred to you. Buyers usually take out title insurance to protect themselves from any unknown issues with the property. Title insurance is mandatory when buyers go through lenders to purchase a home. Because of how important it is to be protected in case of unexpected damage/encumbrances in a new home, it is advised that buyers in any situation take out title insurance. Note that it isn’t uncommon for sellers to cover the costs of title insurance. 

What is a deed? 

A property deed is what proves the transference of property ownership from a seller to a buyer. The legal document contains a detailed description of each property and includes the name of the seller and buyer. For a deed to be authentic, it must be signed by both parties. There are different types of deeds, catering to specific sale types. 

General warranty deed

A general warranty deed is a document that protects the buyer’s interests by disclosing the full rights of the seller. It’s used to check that the seller truly does have the full rights (full title) on the property, therefore having the right to sell. It also discloses any prior knowledge of property issues, ensuring no disappointing and costly surprises down the line. A general warranty deed is usually drawn up by a mortgage company. 

Special warranty deed

Special warranty deeds are usually used for commercial property purchases. It is similar to the general warranty deed, but it only specifies title for whichever period of time the property was owned by the seller. In other words, it details the titles owned by the seller only, not any previous titles. 

Quitclaim deed

You’ll usually come across quitclaim deeds when property is transferred without money. These situations include: 

The transference of property ownership from parents to children, or vice versa

  • The transference of property ownership from one spouse to another
  • The transference of property ownership from individuals to trusts or LLCs, or vise versa
  • In the case of a name change, to modify the legal name on a deed

Quitclaim deeds are definitely not something you’ll come across if you’re buying or selling a home, because they don’t cater to the requirements of title protection. 

The bottom line

A title is the legal right to ownership, while a deed is the actual document that proves ownership of a home. Both titles and deeds come with a long to-do list, which we can help you navigate through here at Wasy Homes. Contact us today for help with buying or selling a home.