Planning on purchasing a home soon? If so, you’ll need to become familiar with the real estate terms “title” and “deed”. The title and deed are transferred when a seller, also known as the grantor, transfers ownership of a home to a buyer, also known as the grantee.
The title and the deed are not the same, however. Each comes with its own list of things to do for both the grantor and the grantee. We’ll look at a title vs a deed and talk about the differences.
What is the difference between a house title vs a deed?
The physical component is the biggest difference between title and deed. A deed is a written document that declares the legal ownership of property by a person. A title is a legal term that refers to ownership rights.
It’s easy to remember: you can own a copy of a real book, but not the title. The title of a book and the title of a property are both the same. They are both concepts and neither is an actual object. The deed is a document that you must keep after purchasing a property.
Understanding the difference between a title and a deed, as well as their purpose, is an important part of purchasing a house. This can ensure that you have the legal right to own your home.
What is a house deed?
A house deed is a legal document used to transfer property ownership from the seller (or grantor), to the buyer (or grantee). The deed includes a description of property including the boundaries, as well as the names of both the seller and buyer. The document must be signed by both parties to make it official.
General warranty deed
A general warranty deed provides protection to the buyer, as it guarantees that the seller is the owner of the property and has the full right to sell. The seller is also assured that they are not aware of any potential property problems. Typically, a mortgage company prepares the general warranties deed.
It’s important to check your local laws as a buyer to understand what the seller must disclose during the buying process. The most common categories of mandatory disclosure are violent crimes on the property, nuisances in the neighborhood such as recurring smells, property damage risks like flooding, and major structural repairs.
The seller may need to state whether the home is located in a historical district, as this designation could limit a homeowner’s ability to remodel.
Special warranty deed
A special warranty deed works similarly to a general guarantee deed but only covers the period when the seller owned the home. This type of deed tends to be used when purchasing commercial property, and not for home purchases.
Quitclaim deed
When a property is being transferred from one entity to another, a quitclaim deed will be used. Some examples of how to transfer with a quitclaim are:
- Transferring property to children by parents
- Transfer of property by a spouse
- Transferring property to LLCs or trusts by individuals
A quitclaim deed can be used to change a title’s legal name. Quitclaim deeds do not provide the same protections as a traditional deed.
Quitclaim deeds are sometimes called “quick claims deeds” but the correct term is quitclaim, not quick claim.
What is a title?
Title is the legal right of ownership, which includes the right to sell. Titles are not only applicable to real estate. Boats, cars, and other valuable assets can be covered by titles. When a legal house purchase is made, the title passes to the buyer. The title of the house and the deed become yours when you purchase a home.
Title insurance
Title insurance covers the buyer against unknown issues and encumbrances. While title insurance is required by lenders, it can also be purchased by buyers.
Many experts advise home buyers to purchase title insurance, or to negotiate with sellers so that they do. This is not uncommon. Title insurance provides protection from any ownership disputes. In the event of a dispute, if a homeowner does not have title insurance, they could lose their home and their money invested in their mortgage.
Title search
The title search is designed to reveal any restrictions on the property’s use. This can include easements or unresolved payment tied to the property such as liens. Title searches can also help determine if the seller is legally entitled to transfer ownership.
While anyone is legally allowed to conduct a search on a property’s title, it’s usually handled by a real estate lawyer or title company. You can get a title check done for title insurance, even though it’s not necessary. A search that is purely for information can also be conducted.
Abstract of title
The abstract of title lists all previous owners, as well as any liens or other encumbrances that may have been placed on the property. The abstract of title is usually the result of research by a title firm into the property’s title chain.
Title FAQs
Have you got more questions regarding titles and deeds? We’ve got answers.
What is the difference between a title and a deed for a home?
A title is the legal right of ownership over a piece of property. While a deed proves that you own the property.
What rights will I have when I receive a title?
You immediately acquire rights as a titleholder. These include the right to possession, control, exclusion, disposition, and enjoyment. These rights allow you to use and enjoy your house as you wish (including making renovations), stop others from entering without your permission, and sell it.
These rights are not unlimited. Local laws apply to them. If you are a homeowner association member, your rights will also be subject to restrictions set forth by the homeowners’ association.
Do I get a title or deed at the closing?
You technically receive both. The title is transferred to your name when you close on your house through the county clerk’s local office. A physical copy of the deed is included in your finalized documents when you leave the closing desk.
The Bottom Line
Understanding the terms associated with purchasing a home is essential to protect yourself, make informed choices, and avoid costly mistakes.
Check local laws to make sure the seller discloses all issues. Store a copy in a safe place. This is proof that you are the owner of the property. Also, you should decide if you need title insurance or if a search is needed. Keep a copy in case of a dispute about ownership. It will also help you to understand your rights and obligations as a homeowner.
We would be happy to help you with any title services that you may need. Contact us for more information.