Two Real Estate terms you will hear often are deed and title.
Both are pieces of documentation that are tied to your home but are still very different from one another.
Here, we break down what each term means and how they differ:
What is a deed?
A deed is a legal document that shows your ownership rights to a property.
This is a physical and written document that transfers ownership from the sellers to the buyers of the property.
There are different types of deeds such as:
- general warranty deeds
- special warranty deeds
- quitclaim deeds
However, during a home sale, the most common and likely one you will be dealing with is the property deed.
What is a title?
The title is the legal ownership of a property. You can “hold title” to a property, but the title is not a physical document like a deed is.
It is more so a way of saying the property is yours, you own it, and have the right to sell it.
When you purchase a home, you receive the deed stating that you have title to that piece of Real Estate.
How do they differ?
Both deeds and titles prove ownership of a property, but a deed is a physical document whereas the title is a concept.
When going through the home buying process, a title company will perform a title search on the house to ensure there are no issues, disputes, liens, or claim possessions on the property.
This will make certain that you truly have 100% right to ownership. A deed alone does not do all that for you which is why a title search is so important.
When everything checks out, at closing, the seller will transfer over the title and grant you legal ownership.
After that, the title or escrow company will record the deed with your county assessor’s office or courthouse and the deed will then be sent to you.
This is also why it is important to ignore spam that will be sent to you after your closing asking you to purchase the deed to your home. It will already be taken care of for you.
Can I insure my title or deed?
Typically, a deed can is not insured but it is recommended to purchase title insurance.
This will protect you from anything that may not come up in the title search, potentially ruining the deal on your home. Or worse, getting you into a legal battle with an undiscovered owner or heir to the property.
Read more about title insurance here.