Deed vs. Title: What Are the Differences?

Learn More About Real Estate Deeds and Titles

When you’re buying or selling a home, you’ll want to understand the difference between property titles and deeds. Both a “deed” and a “title” are required to buy a home and establish your status as an official homeowner.

A title to a house is a legal concept that establishes your ownership of the property and gives you certain rights to it. A deed is a physical legal document that transfers ownership of a property from a seller to a buyer. Knowing what they are can help you prove your homeownership status or navigate property transfers should the need arise.

Property Title vs. Deed: Key Feature Comparison

When buying a home, both titles and deeds play a role during the closing process, but they serve different purposes. While the property title establishes legal ownership, the deed is a legal document that transfers the title of ownership from the seller to the buyer.

What Is a House Title?

A house title is a legal concept that proves you own a property. When you hold the title, the law recognizes you as the owner with the rights to live in the home, sell it, and decide how it’s used within local laws and regulations. This means you can make changes to the property, allow or restrict access, and use the home as you choose, as long as you follow zoning rules, building codes, and other local requirements.

The title can be held by a single person or shared by multiple people. When one person holds title, it’s known as sole ownership. When two or more people share ownership, it’s typically structured as a joint tenancy. In a joint tenancy, each owner has equal rights to the property and the right to survivorship. This means that if one owner passes away, their share automatically transfers to the surviving owner.

Bundle of Rights in Real Estate

A title isn’t a physical document that you hold. Instead, it represents a set of legal rights that come with established ownership. These rights define what you’re allowed to do with your home and how you can use it.

• Right of possession: You have the legal right to occupy and use the property. No one else can claim it as their own while you hold title.
• Right of control: You can decide how to use the property, as long as you follow local laws and regulations. This means you can renovate or adapt it as you see fit, or you can choose to rent it out if your type of mortgage allows for it.
• Right of exclusion: You can choose who is allowed to enter or stay on the property.
• Right of enjoyment: You’re free to use and enjoy the property in ways that don’t infringe on local laws.
• Right of disposition: You can sell, transfer, or leave the property to someone else, as long as there are no outstanding debts or liens against the property.

How a Property Title Is Verified

You can verify property ownership through a title search, abstract of title, or title insurance.

• Title search: Through a process known as a property title search, a title company reviews public records to confirm who legally owns the property and uncover any liens, claims, or ownership disputes.
• Abstract of title: This is a summarized history of the property that shows past owners, transfers, and recorded legal documents tied to the home.
• Title insurance: This protects buyers and lenders from financial loss if an ownership issue or hidden claim comes up after the sale.

What Is a Deed?

A deed is a legal document that transfers ownership of property from a seller to a buyer, effectively declaring your legal ownership of the property. Both the seller and buyer need to sign the deed, and the deed must be recorded in the public records of the local county government.

A deed needs to state the seller (the “grantor”) and the buyer (the “grantee”). It must contain a sufficient description of the property, including the home and property lines. Finally, a deed needs to comply with the laws in the community in which the property is located.

Types of Property Deeds

There are several types of property deeds. The type can affect how much protection the buyer receives and what the seller legally promises.

• General warranty deed: This offers the strongest protection for buyers and includes a guarantee from the seller that they will compensate the buyer if problems related to ownership or liens arise after the sale closes. With this deed, the seller guarantees that they have a “clear and unencumbered” title to the property. This means that their ownership of the property cannot be disputed by a third person, and there are no liens or financial claims on it.
• Special warranty deed: The seller’s guarantee only covers the period of time during which they owned the property. They do not guarantee that previous owners had a clear and unencumbered title to the property or that there are no liens or financial claims on the property from previous owners.
• Quitclaim deed: This deed doesn’t guarantee ownership disputes or liens and is often used when ownership of the property is transferred without a sale. For example, quitclaim deeds may be used when ownership of a house is transferred between family members, such as from a parent to a child.
• Deed-in-lieu of foreclosure: This allows a homeowner to voluntarily transfer the property to the lender to avoid foreclosure. In exchange, the lender typically agrees to cancel the remaining mortgage debt.

Home Deed vs. Property Title FAQs

Below are the answers to the most frequently asked questions about home deeds vs. property titles.

What’s the Main Difference Between a Deed and a Title?

The main difference between a deed and a title is that a title represents legal ownership of a property, whereas a deed is the physical document that transfers ownership from the seller to the buyer.

Which Is More Important, a Title or a Deed?

A title and a deed are equally important and work together in the home-buying process. The deed transfers ownership, while the title documents who legally owns the property.

Who Holds the Title of Your House?

The person or people listed on the recorded deed hold the title to the house. If you have a mortgage, the lender holds a lien, which gives them a financial interest, not ownership, of the property.

Final Thoughts: Comparing House Title vs. Deed

When comparing a home deed vs. title, both are equally important in the home-buying process. The deed is the legal document that transfers ownership, while the title reflects your legal rights as the owner once that transfer is complete. Knowing what each one does makes it easier to confirm ownership or manage a property transfer if the situation comes up during a home sale.

Are you preparing to buy a home or want to better understand what to expect next? Get prequalified today with Freedom Mortgage.