Some people use the terms title and deed interchangeably when it comes to real estate. For this reason, it is no surprise if you think the two concepts are the same. It is true that titles and deeds overlap. Still, they are not identical in all respects.
Clearing up any misunderstandings between the concepts of a deed and a title is crucial if you are in the process of buying a new home and want to avoid disputes with other parties who may claim ownership of the residence. U.S. News and World Report explains the differences between deeds and titles.
A deed represents the fact that you own a piece of property. It is a document used to transfer ownership from a seller to a buyer. If you possess a deed, it should contain your name and the name of the seller of the property as well as the seller’s signature.
Deeds take different forms depending on the transaction and the history of the property you purchase. You may have a general warranty deed, which is common to many home sales. Alternatively, you may have received your property through a quitclaim deed, a bargain and sale deed, or a grant deed.
While a deed represents your right to own your home or commercial property, it is not the right itself. The property title is your right to own a piece of property. This is an important distinction because while you may have a deed that says you own a property, someone else may also have a claim to your property. This other party might claim ownership through financial records or a lien placed on your property.
This problem is why it is a good move to have title insurance. Some deeds like quitclaim deeds do not guarantee that someone else does not possess an ownership claim. A title insurance company protects you from undiscovered claims by researching a title history and covering expenses like unpaid liens.