Deed Vs. Title: Know The Difference

Home buyers and sellers, unfortunately, can become overwhelmed by everything that goes into the buying or selling process, and the extensive use of real estate jargon along the way doesn’t make matters any less intimidating.

Like much of the terminology associated with the real estate industry, “title” and “deed” can cause confusion among those looking to buy or sell a home. While the terms title and deed have some similarities, there are key differences that you'll want to be aware of as you navigate the home buying process. Understanding the features distinguishing a title from a deed can help you feel more confident about home buying.

Title Vs. Deed, Explained

A title and deed are similar in that they both involve property ownership, but they differ in their appearance, overall intent and how they come into play during the closing process.

A title is a concept used to discuss ownership of a home, whereas a deed is a physical document proving the ownership – or the title.

Since the deed is tangible, it transfers the title from the seller (commonly referred to as the grantor) to the buyer (otherwise known as the grantee). The grantee will receive the title to the property and the associated deed at the closing phase of the home-buying journey.

House Deed, Defined

We’ve already covered the major difference between a house title and a deed, but it’s worth examining what each of these terms means.

When you purchase a home, you’ll receive the property deed – a legal document that provides a description of the property and declares your ownership, or title, over it.

Both the grantor and grantee are responsible for signing the document toward the end of the closing process.

Types Of Deeds

There are several types of deeds, each of which serves a different purpose. These deeds vary in levels of protection for the home buyer. Let’s take a look at a few of the popular types of deeds so you can decide which might be best for your situation.

General Warranty Deed

A general warranty deed guarantees that the seller isn’t hiding anything and is unaware of any property issues that might arise in the future. The deed also ensures the absence of any outstanding mortgages, liens or other claims against the property. A general warranty deed provides the most substantial protection to the home buyer.

Special Warranty Deed

Used more commonly with commercial real estate sales, the special warranty deed is similar to the general warranty deed but only applies to a specific time frame. This deed doesn’t protect against any claims that might have been filed before the current seller obtained the title.

Quitclaim Deed

A quitclaim deed is most commonly used in situations where property is transferred from one owner to another – such as parents to adult children or spouse to spouse – without the exchange of money.

Bargain And Sale Deed

A less popular type of deed, the bargain and sale deed, is most commonly used in the states of New York, Washington, Wyoming, Colorado and Vermont during situations involving foreclosure, tax sales or transferring property between family members.

Deed In Lieu Of Foreclosure

When borrowers can’t keep up with their mortgage payments but want to avoid the negative impacts of foreclosure, they might agree to transfer the property to the lender through a deed in lieu of foreclosure.

House Title, Defined

Unlike a deed, a house title isn’t a tangible document you can hold in your hands. Instead, it’s a legal term that refers to your ownership of a home and the responsibilities that come with that ownership.

If you hold the title to a home, you have ownership along with all the legal rights to the property, including the right to sell. One or multiple people, like in the instance of a married couple, can hold a title. Corporations, partnerships, and organizations can also have titles.

House Title Terms To Know

Additional real estate terms are closely related to a title, and home buyers and sellers should be aware of them.

• Title insurance: Title insurance comes in two forms: lender’s title insurance and owner’s title insurance. The former protects the lender against potential losses, and the latter protects home buyers/soon-to-be-owners from unknown property issues. Lender’s title insurance is mandatory, and owner’s title insurance is optional.
• Title search: Typically conducted by a title company or real estate attorney, a title search involves the search of public records, including any former liens, deeds, mortgages, etc., that will impact the title of a property.
• Abstract of title: An abstract of title provides a home buyer with the entire legal history of a property, including any litigations, tax sales, deeds, title transfers, mortgages and encumbrances.

House Deed Vs. Title: Similarities And Differences

As previously noted, titles and deeds are similar in that they both reference property ownership; however, there are clear differences in the way these items look, their overall intent, and the way they’re handled during the closing process.

Physical Appearance

The biggest difference between a title and a deed is their form or appearance. A title is a concept people use to discuss ownership of a home, but a deed is an actual physical document that proves ownership (or title). You can physically hold a deed in your hand, but you can only discuss the title.

Overall Intent

If someone has a house title, they’re considered the owner of the property and given what’s referred to as a bundle of rights.

The bundle of rights includes:

• Right of possession: This ensures that the title holder can possess or own the property.
• Right of control: This allows the title holder to use the property however they want, as long as they aren’t breaking the law.
• Right of exclusion: This ensures that the title holder can limit who’s allowed to enter the property.
• Right of disposition: This allows the title holder to sell, rent or transfer ownership of the property.
• Right of enjoyment: This ensures that the title holder can enjoy the property.

A deed, on the other hand, is the physical documentation that provides proof of any title transfers that occur.

How They’re Handled

The differences between a title and a deed become clearer during the home closing process when they’re both used.

After a title search is completed and it’s been verified that the current owner has the right to transfer the property, the following steps usually happen:

1. First, a settlement agent will prepare all necessary closing documents, including the physical deed. This is only done once the agent has verified that the seller has the right to transfer the title to the property.
2. The agent will then schedule the closing. This is where the title transfer usually happens.
3. Both the seller and buyer will sign the physical deed document. This transfers the title and ownership of the property from the seller to the buyer.

Is A Deed Better Than A Title?

When you buy a home, you need both the deed and the title; one isn’t better than the other. The title is the concept of legal ownership while the deed is the document that proves ownership. Moreover, you can’t have a valid house deed if you don’t hold title.

FAQs

Can I be evicted if my name is on the deed?

No, you cannot be evicted if your name is on the deed. If your name is on the deed to the property, that means that you are a legal owner of the property. However, if you are not the only owner of the property, and there is a dispute about the ownership of the property, you may need to go through a legal process to resolve the situation. This may include court proceedings including foreclosure or a quit claim.

Can someone take your house if they have the deed?

The deed is the legal instrument that proves ownership of a piece of property. While not common, deed fraud can happen, where criminals or identity thieves fraudulently obtain a deed for a piece of property that you own. It is possible to take legal action to reclaim your property if you are the victim of deed fraud, it can be a complicated process. Some ways to help protect yourself include monitoring your county recorder's office, sign up for identity theft insurance and purchasing title insurance.

How do I get my ex's name off the deed to my house?

If you have recently gotten divorced and your ex-spouse is still on the deed to your house, the easiest way to remove their name from the deed is to have them sign a "quit claim" deed. This will usually require your spouse to cooperate, and if they refuse, you may have to consider legal options such as a court order as part of a divorce proceeding.

The Bottom Line: Key Differences Between A Deed And A Title

A deed and title similarly refer to the ownership of a property, but there are key differences to be aware of as you venture into the home buying (or selling) process.

Remember that while a title refers to your ownership of a property, a deed is a physical document used to prove and transfer that ownership.

Once you feel confident you understand the differences between a title and deed, and decide which type of deed best suits your situation, take action and start your mortgage application online with the Home Loan Experts at Rocket Mortgage^®.