Understanding the Difference Between Deed and Title

Key Concepts

• Title: A concept of ownership rights to a property.

  • Refers to legal ownership of a home.
  • Provides the right to live, use, and transfer interest in the property.
  • Not a physical document.
  • Involves a "bundle of rights":
    • Right of possession
    • Right of control
    • Right of exclusion
    • Right of enjoyment
    • Right of disposition
  • Requires a clear title for property transfer, free of defects (e.g., liens, judgments).

• Deed: A physical legal document representing transfer of ownership.

  • Guarantees that the seller owns the property free of any encumbrances or liens.
  • Contains names of the seller and buyer, legal description of the property.
  • Must be signed by the seller, often notarized.
  • Needs to be recorded to be binding, but an unrecorded deed does not invalidate title.

Types of Deeds

• General Warranty Deed

  • Common in home sales.
  • Provides maximum protection to the buyer.
  • Guarantees clear title and right to sell with no known issues.

• Special Warranty Deed

  • Used in commercial real estate.
  • Guarantees clear title only during the seller's ownership.

• Grantee Deed

  • Shows clear title but does not guarantee defense against future claims.

• Quitclaim Deed

  • Offers least protection.
  • Transfers rights without warranty of the seller's right to sell.
  • Common within family transfers (e.g., father to son).

• Bargain and Sale Deed

  • Used in tax sales or foreclosures.
  • Does not require clear title, no buyer protections.

Summary

• Title and Deed are distinct concepts in real estate.
• Title shows ownership rights, while a deed is the legal document for transferring those rights.
• Understanding both is crucial for recognizing your rights and responsibilities in real estate transactions.