If you’re planning on buying a house soon, “title” and “deed” are two key real estate 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), the deed and the title transfer.
A deed and a title, however, aren’t the same, and each comes with a to-do list for the buyer (aka grantee) and seller (aka grantor). Let’s take a closer look at what is a title versus a deed and how they differ.
The Difference Between A House Title Vs. A Deed
The biggest difference between a title and a deed is the physical component. A deed is an official written document declaring a person’s legal ownership of a property, while a title is a legal concept that refers to ownership rights.
Here’s a way to remember the difference: You can own a physical copy of a book, but you can’t hold the book’s title in your hand. A book title and a property title work the same. Both are concepts, and neither is a physical object. A deed, however, is a physical document that must remain in your possession after you purchase a property.
Knowing what a title is versus a deed and the purpose of each is a fundamental part of buying a home. This knowledge can help ensure your legal right to call your home your own.
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What Is A House Deed?
A house deed is a legal document that transfers property ownership from a seller (or grantor) to a buyer (or grantee). The deed contains a description of the property, including property lines, and indicates the seller and the buyer. Both parties must sign the document to make it official.
General Warranty Deed
A general warranty deed protects the buyer by guaranteeing the seller has full title, is the sole property owner and has the right to sell the property. It also assures the seller does not know of any property issues that may arise. A mortgage company typically prepares the general warranty deed.
As a home buyer, it’s critical to review your local laws to know what a seller should disclose to you during the home buying process. Frequent categories for mandatory disclosure include any violent crime on the property, neighborhood nuisances such as recurring odors, persistent property damage risks such as flooding and any major structural repairs on the property.
Sellers may also need to disclose whether the house is part of a historic district since this designation may limit a homeowner’s ability to remodel their home.
Special Warranty Deed
A special warranty deed is similar to a general warranty deed, but it only guarantees title during the time the seller owned the property. This type of deed is typically used for commercial property purchases, not home purchases.
Quitclaim Deed
Quitclaim deeds are typically used when a property is transferred from one legal entity to another without moneychanging hands. Popular examples of transferring with a quitclaim include:
- Parents transferring property ownership to children
- A spouse transferring property ownership to their spouse
- Individuals transferring property ownership to trusts or LLCs
You can also use a quitclaim deed to change the legal name on a deed. But quitclaim deeds don’t provide the standard protections a buyer receives with a conventional deed.
You may hear quitclaim deeds referred to as “quick claim deeds.” Although transferring property with a quitclaim deed can be quick, the right way to say it is: quitclaim deed, not quick claim deed.
What Is A Title?
A title is a legal right to ownership of a property, including the right to sell. Real estate isn’t the only asset where title applies. Title can also apply to boats, cars and other valuable assets. The legal purchase of a house transfers the title to the buyer. When you buy a house, the house title and deed are both yours.
Title Insurance
Title insurance protects the buyer from unknown property issues or encumbrances. Lenders always require title insurance, but buyers can take out title insurance, too.
Most experts recommend home buyers purchase title insurance or negotiate with the seller to have them buy it, which isn’t uncommon. Title insurance is a crucial protection against any ownership dispute. If a dispute arises and a homeowner doesn’t have title insurance, in the worst-case scenario, the buyer may lose their property and the money they’ve invested in their mortgage.
Title Search
A title search seeks to uncover any limitations on property use. These limitations can include easements and unresolved payments tied to the property, such as liens. A title search also helps determine whether the seller has thelegal right to transfer ownership.
Although anyone can legally conduct a title search, a title company or real estate attorney typically handles this task. While it isn’t necessary, you can have a title search done to secure title insurance. You can have a purely informational search conducted, as well.
Abstract Of Title
An abstract of title is a document that lists the property’s previous owners and any past encumbrances, such as liens. It’s typically the product of a title company’s research into a property’s chain of title.
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Deed Vs. Title FAQs
Do you have more questions about deeds and titles? Fortunately, we’ve got the answers.
How is a house title different from a deed?
A title is a legal right to ownership of a property, while a deed is a legal document that proves you own a property.
What rights do I get when I receive my title?
As the titleholder, you immediately gain rights, including the right of possession, right of control, right of exclusion, right of disposition and right of enjoyment. These rights let you use and enjoy your home as you see fit (including renovations), prevent individuals from entering your home without permission and give you the right to sell your home.
But these rights have their limits. They are subject to local laws. And if you’re a member of a homeowners association, your rights are also subject to the restrictions set by the homeowners association.
Do I receive a deed or title at closing?
Technically, you receive both. When you close on your home, the title gets transferred into your name through the local county clerk’s office. When you leave the closing table with your finalized documents, a physical copy of your deed should be in that pile of papers.
The Bottom Line
To protect yourself as a buyer, make informed decisions and help avoid costly mistakes, it’s crucial to understand the terminology associated with buying a house.
Read up on local laws to ensure the seller is disclosing all property issues. Keep a copy of your deed somewhere safe. It’s the proof that you own the property. You should also determine whether you want title insurance and want to conduct a title search. Make sure to keep a copy of the abstract of title in case there is a dispute over ownership and to learn your rights and responsibilities as a homeowner.
Patrick Chism
Born and raised on a farm in the Ozarks, Patrick Chism 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 an 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, Patrick likes hiking, gardening, reading and making healthy foods taste like unhealthy foods.
