Female couple signing paperwork with an agent.

Deed Vs. Title: Know The Difference

5-Minute Read
Published on November 16, 2020

If you’re planning on buying a house soon, “title” and “deed” are two key terms you’ll want to have down cold. When a seller (known as the grantor) transfers ownership of a house to a buyer (known as the grantee), both the deed and the title transfer. A deed and a title, however, are not quite the same thing, and both come with an important to-do list for the buyer/grantee and seller/grantor.

The Difference Between A Title And A Deed

The biggest difference between a deed and a title is the physical component. A deed is an official written document declaring a person’s legal ownership of a property, while a title refers to the concept of ownership rights.

Here’s a way to remember the difference: although you can own a physical copy of a book, you can’t hold a book’s title in your hand. In this way, a book title and a property title are the same: neither are physical objects, but rather concepts. A deed, on the other hand, can (and must) be in your physical possession after you purchase property.

Understanding titles and deeds, as well as their purpose, is a fundamental part of homeownership and is essential throughout the beginning of the buying process.

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What Is A House Deed?

A house deed is a legal document that transfers property ownership from a seller/grantor to a buyer/grantee. A deed contains a description of the property (including property lines) and denotes the seller/grantor and the buyer/grantee. Both parties must sign the document to make it official.

General Warranty Deed

A general warranty deed protects the buyer/grantee by assuring them that the seller/grantor has full title and is the sole property owner with rights to sell. It also promises that the seller/grantor has no knowledge of any property issues that may come up. It’s typically prepared by a mortgage company.

As a home buyer, it’s important to look into your local laws to understand what should be disclosed to you during the buying process. Frequent categories for mandatory disclosure include a history of violent crime on the property, neighborhood nuisances such as recurring bad odors, persistent property damage risks such as flooding and any major structural repairs that have been made. Sellers may also need to disclose whether the house is part of a historic district, as this can limit the extent to which a house can be remodeled.

To-do for the seller/grantor: Research your local laws to find out what type of risks you must disclose.

To-do for the buyer/grantee: With the seller/grantor, decide whether this type of deed is right for you.

Special Warranty Deed

A special warranty deed is similar to a general warranty deed, but only guarantees title for the time the property was owned by the seller. This type of deed is not typically used for home purchases, but rather for purchase of commercial property.

To-do for the buyer/grantee: With the seller/grantor, decide whether this type of deed is right for you.

Quitclaim Deed

Quitclaim deeds are typically used when a property is transferred from one legal entity to another without any money changing hands. Popular examples of transfer via quitclaim include:

  • Parents transferring property ownership to children
  • One spouse transferring property ownership to the other
  • Individuals transferring property ownership to trusts or LLCs

Another relatively common use of quitclaim deeds is to change the legal name written on a deed in the case of a name change.

Quitclaim deeds don’t come with the protections for the recipient that a buyer receives with a conventional deed.

Tip: Quitclaim deeds are sometimes erroneously referred to as “quick claim deeds.” Although the process of transferring property via quitclaim deed is indeed very quick, and this can be a good way to remember the difference between a quitclaim deed and a general warranty deed, it’s not correct to call a quitclaim deed a “quick claim deed.”

To-do for the buyer/grantee: With the seller/grantor, decide whether this type of deed is right for you.

What Is A Title?

A title is a legal right to ownership of a property, including the right to sell. It’s not just real estate that comes with titles – boats, cars and many other property items of value do as well. Legal purchase of a house transfers the title to the buyer, so if you do buy a house, the title will be yours along with the deed.

Title Insurance

Title insurance is meant to protect the buyer from unknown property issues or encumbrances. Lenders will always require title insurance, but buyers can also take out title insurance.

Most experts recommend that home buyers go ahead and purchase this insurance or negotiate with the seller to have them purchase it for the buyer (this is not uncommon). Title insurance is a crucial protection in the case of any kind of ownership dispute. If a dispute does arise without insurance to protect the buyer, in a worst-case scenario, the buyer could lose their property and the money they have invested in their mortgage.

To-do for the buyer/grantee: Decide whether you would like to have title insurance. Decide whether you are going to try to negotiate with the seller to have them pay for your title insurance.

To-do for seller/grantor: Decide whether you are willing to pay for the buyer’s title insurance.

Title Search

A title search is done to uncover any limitations on property use such as easements and any unresolved payments tied to the property, such as liens. It also helps determine that the seller truly has a legal right to transfer ownership.

Although any individual may legally conduct a title search, it’s typically done by the title company, or a real estate attorney. You can have a title search done as part of the process of securing title insurance, but it isn’t necessary. It is possible to have a purely informational search conducted.

To-do for the buyer/grantee: Decide whether your title search will be part of the process of purchasing a title warranty. Decide who you would like to conduct your title search (or if you will take it on yourself).

Abstract Of Title

An abstract of title is a document that lists the property’s previous owners, as well as any past encumbrances, such as liens.

To-do for the buyer/grantee: This is another paper document that you should have in your possession and store safely along with the deed after you purchase your home.

The Bottom Line

It’s crucial to fully understand the terminology that comes with the process of buying a house. Remember that a title is a legal right to ownership, while the deed is the physical object that documents that rightful ownership. Both titles and deeds come with to-do lists.

With deeds, it’s important to make sure you physically have your deed and to read up on your local laws to make sure you are disclosing all property issues. With titles, it’s important to decide on if you want title insurance, conduct a title search and make sure you physically possess the abstract of title.

If you’re at the beginning of this home-buying process, preapproval is your next step in order to know what you can expect financially when buying a home.

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Patrick Chism

Born and raised on a farm in the Ozarks, Patrick has a knack for making the best out of the worst situations. Where others see flooded farmland, he sees lakefront real estate. Where others see an infestation of bees, he sees free pollination and a upstart honey shop. Patrick’s articles will help you make the most out of the least, maximizing your returns while keeping a close eye on the wallet. When he’s not writing for Rocket Mortgage, Patrick likes hiking, gardening, reading and making healthy foods taste like unhealthy foods.