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When you are involved in any real estate transactions, there will be terms you constantly hear, such as title and deed. But what are these legal terms, and how do they impact your deal? Understanding the differences between the two will make you a more educated participant in any sale or transfer. You will also be better positioned to navigate the closing process without being overwhelmed by the amount of jargon.

While many people thing that title sounds is a tangible piece of paper, it is actually only a legal concept. However, a property deed is, in fact, a legal document you can hold in your hands.

The terms title and deed are often used interchangeably, which can lead to confusion. If you are not a real estate professional, you likely do not know the nuances of each term. The details can be confusing, but it is important to understand the difference between each concept.

After reading this article, you will understand the basics of titles and deeds and be able to explain the differences between the two.

Property Deed or Title?

When buying a home or another piece of property, the legal terms that get thrown around can be intimidating, particularly if you are not familiar with the real estate industry. Keep reading to learn what exactly a property deed is and some examples of common deeds you may encounter in a real estate transaction. We will also explain title and how the legal term is different from deeds.

What Is a Property Deed?

A property deed is a legal contract that transfers property from one person or entity to another. The individual or party selling the land, building, or item is referred to as the grantor. The recipient or buyer is legally called the grantee.

The two parties must execute a legally enforceable deed to transfer the property. Any deed for the transfer of land must be in writing due to statute of fraud laws. To be valid, every deed must at least contain the following elements:

  • A clause representing that the grantor has the legal right to transfer/sell the property.
  • A clause representing the grantee is legally allowed to receive the property.
  • A written description of the property accurate enough to readily identify what is being transferred.
  • Signatures from both the grantee and grantor.

The description can refer to a survey for large parcels of land or a specific plot in a residential or commercial subdivision. As long as it can quickly be distinguished based on the description, the deed will be valid.

There are a few distinct types of deeds commonly seen in real estate transactions, including the following:

General Warranty Deed

Typically used during single-family home sales, a general warranty deed offers maximum protection for the buyer/grantee. If the grantor signs off on a general warranty deed, they explicitly state they have a clear right to the property. They represent there are no other people with an interest in the property, and it is clear of all liens.

Special Warranty Deed

Unlike a general warranty deed, the special warranty deed only promises clear ownership since the grantor acquired the property. If the seller has controlled the land for decades, a special warranty deed still conveys protection. But if you are offered a special warranty deed by a party that has only owned the property for a couple years, beware.

Grant Deed

Both types of warranty deeds require the grantor to defend their prior ownership against any subsequent legal challenges. This could be costly, so grantors do not make this warranty lightly. The grant deed contains a promise that the grantor does not know of any potential other owners or liens. However, it does not include a guarantee that the grantor will defend ownership if a challenge arises.

Quitclaim Deed

The quitclaim deed offers the grantee/buyer the least amount of protection of any type of deed. Though a quitclaim deed transfers the right to own the property, it does not contain any promises regarding clean title or ownership rights. Therefore, quitclaim deeds are only typically used when both parties have a significant deal of trust. A lot of family land sales or transfers will be made via quitclaim deeds.

Bargain and Sale Deed

A bargain and sale deed is used to transfer property subject to a tax sale or foreclosure. If you purchase a home via a bargain and sale deed, you will also inherit any liens against the property.

What Is a Title?

Unlike deeds, title is not a legal document. Instead, it is a concept that you have ownership rights over a property. “Clean” title means that you have a bundle of rights, including:

  • Right of possession
  • Right of exclusion
  • Right of control
  • Right or disposition

Challenges to your title may come in the form of liens or because a previous owner did not have a clean title when they sold you the land. Liens arise from debts, some of which do not even relate to the land itself. For example, delinquent tax payments or default on a contractor’s loan can lead to a lien against a home, as can failing to make your child support payments.

Ensuring you have a clean title often takes research. If you give a warranty that your title is clear when you sell or transfer a property via deed, you are then responsible if someone subsequently challenges the right to ownership.

Abstract of Title

To help explain the chain of title, a land-sale contract usually includes an abstract of title. The abstract traces all ownership claims previously recorded with local authorities, typically the county clerk.

Title Insurance

When buying or selling property, you may need to acquire title insurance. Like other forms of insurance, you pay a premium so that if you discover any title defects, you do not have to pay out of pocket to defend your ownership or warranties.

On some properties, ownership grants and encumbrances may stretch back centuries. You can pay an expert attorney or title company to perform a thorough title search. The researcher will examine all available records to determine whether there are any potential title defects before you close on a sale.

Differences Between a Deed and Title

Below are the most significant differences between the legal concepts of deed and title.

Distinguishing Between Titles and Deeds
Deed Title
Legal document. Legal concept, but no actual piece of paper.
Transfers the right of ownership of property. Is the right of ownership itself.
Contains a description of the property. Includes the bundle of rights that can be transferred via a deed.

Hopefully, you are now able to decide which deed is appropriate for your real estate transaction. LawDistrict.com has simple, easy-to-use deed templates, including quitclaim deeds. Each one can be perfectly tailored to your exact needs as a grantor or grantee of property.

When you are involved in any real estate transactions, there will be terms you constantly hear, such as title and deed. But what are these legal terms, and how do they impact your deal? Understanding the differences between the two will make you a more educated participant in any sale or transfer. You will also be better positioned to navigate the closing process without being overwhelmed by the amount of jargon.

While many people thing that title sounds is a tangible piece of paper, it is actually only a legal concept. However, a property deed is, in fact, a legal document you can hold in your hands.

The terms title and deed are often used interchangeably, which can lead to confusion. If you are not a real estate professional, you likely do not know the nuances of each term. The details can be confusing, but it is important to understand the difference between each concept.

After reading this article, you will understand the basics of titles and deeds and be able to explain the differences between the two.

Property Deed or Title?

When buying a home or another piece of property, the legal terms that get thrown around can be intimidating, particularly if you are not familiar with the real estate industry. Keep reading to learn what exactly a property deed is and some examples of common deeds you may encounter in a real estate transaction. We will also explain title and how the legal term is different from deeds.

What Is a Property Deed?

A property deed is a legal contract that transfers property from one person or entity to another. The individual or party selling the land, building, or item is referred to as the grantor. The recipient or buyer is legally called the grantee.

The two parties must execute a legally enforceable deed to transfer the property. Any deed for the transfer of land must be in writing due to statute of fraud laws. To be valid, every deed must at least contain the following elements:

  • A clause representing that the grantor has the legal right to transfer/sell the property.
  • A clause representing the grantee is legally allowed to receive the property.
  • A written description of the property accurate enough to readily identify what is being transferred.
  • Signatures from both the grantee and grantor.

The description can refer to a survey for large parcels of land or a specific plot in a residential or commercial subdivision. As long as it can quickly be distinguished based on the description, the deed will be valid.

There are a few distinct types of deeds commonly seen in real estate transactions, including the following:

General Warranty Deed

Typically used during single-family home sales, a general warranty deed offers maximum protection for the buyer/grantee. If the grantor signs off on a general warranty deed, they explicitly state they have a clear right to the property. They represent there are no other people with an interest in the property, and it is clear of all liens.

Special Warranty Deed

Unlike a general warranty deed, the special warranty deed only promises clear ownership since the grantor acquired the property. If the seller has controlled the land for decades, a special warranty deed still conveys protection. But if you are offered a special warranty deed by a party that has only owned the property for a couple years, beware.

Grant Deed

Both types of warranty deeds require the grantor to defend their prior ownership against any subsequent legal challenges. This could be costly, so grantors do not make this warranty lightly. The grant deed contains a promise that the grantor does not know of any potential other owners or liens. However, it does not include a guarantee that the grantor will defend ownership if a challenge arises.

Quitclaim Deed

The quitclaim deed offers the grantee/buyer the least amount of protection of any type of deed. Though a quitclaim deed transfers the right to own the property, it does not contain any promises regarding clean title or ownership rights. Therefore, quitclaim deeds are only typically used when both parties have a significant deal of trust. A lot of family land sales or transfers will be made via quitclaim deeds.

Bargain and Sale Deed

A bargain and sale deed is used to transfer property subject to a tax sale or foreclosure. If you purchase a home via a bargain and sale deed, you will also inherit any liens against the property.

What Is a Title?

Unlike deeds, title is not a legal document. Instead, it is a concept that you have ownership rights over a property. “Clean” title means that you have a bundle of rights, including:

  • Right of possession
  • Right of exclusion
  • Right of control
  • Right or disposition

Challenges to your title may come in the form of liens or because a previous owner did not have a clean title when they sold you the land. Liens arise from debts, some of which do not even relate to the land itself. For example, delinquent tax payments or default on a contractor’s loan can lead to a lien against a home, as can failing to make your child support payments.

Ensuring you have a clean title often takes research. If you give a warranty that your title is clear when you sell or transfer a property via deed, you are then responsible if someone subsequently challenges the right to ownership.

Abstract of Title

To help explain the chain of title, a land-sale contract usually includes an abstract of title. The abstract traces all ownership claims previously recorded with local authorities, typically the county clerk.

Title Insurance

When buying or selling property, you may need to acquire title insurance. Like other forms of insurance, you pay a premium so that if you discover any title defects, you do not have to pay out of pocket to defend your ownership or warranties.

On some properties, ownership grants and encumbrances may stretch back centuries. You can pay an expert attorney or title company to perform a thorough title search. The researcher will examine all available records to determine whether there are any potential title defects before you close on a sale.

Differences Between a Deed and Title

Below are the most significant differences between the legal concepts of deed and title.

Distinguishing Between Titles and Deeds
Deed Title
Legal document. Legal concept, but no actual piece of paper.
Transfers the right of ownership of property. Is the right of ownership itself.
Contains a description of the property. Includes the bundle of rights that can be transferred via a deed.

Hopefully, you are now able to decide which deed is appropriate for your real estate transaction. LawDistrict.com has simple, easy-to-use deed templates, including quitclaim deeds. Each one can be perfectly tailored to your exact needs as a grantor or grantee of property.