Deed vs. Title: 8 Things You Should Know in 2023 (2024)

When you think of buying and selling property, you’re probably familiar with the terms “title” and “deed.”

Do you use them interchangeably?

If you do, you wouldn’t be the only one.

Although these terms are not synonymous, they are closely linked, and you should be highly familiar with how they’ll impact the buying process.

In this blog, we’ll run through the things you should know about the differences between a title and a deed.

Let’s get started.

1. A title refers to the legal ownership of a property and the rights that come with it

A title proves legal ownership of a certain asset – land, home, car, etc.

However, unlike a deed, a property title isn’t a physical document.

It is a concept and is conveyed through property deeds.

If you have a valid deed, your title’s bundle of rights will include the following.

Deed vs. Title: 8 Things You Should Know in 2023 (1)The right of control:

You’ll be able to use the property in the lawful manner you choose.

Keep in mind that the right of control isn’t absolute.

If there are covenants or restrictions in place that limit the allowable uses (such as a homeowner’s association CCRs or local zoning restrictions), you must abide by them even if you have clear title.

Deed vs. Title: 8 Things You Should Know in 2023 (2)The right of disposition:

You’ll be able to permanently or temporarily transfer ownership of the property as long as there are no loans, liens, or other encumbrances.

Deed vs. Title: 8 Things You Should Know in 2023 (3)The right of enjoyment:

You’ll be able to enjoy the property in any lawful manner (this is different than the right of control).

The long and short of this is that you must follow all laws while on your property.

Deed vs. Title: 8 Things You Should Know in 2023 (4)The right of exclusion:

You have the right to choose who is allowed on the property.

This is usually an absolute right in that you are typically allowed to restrict access to your property as you see fit.

However, if there is an easement on your property (such as an access or utility easement), the easement holder will have the right to access your property as allowed under the terms of the easement.

Deed vs. Title: 8 Things You Should Know in 2023 (5)The right of possession:

You have the legal right to claim ownership of the property.

Title may also (but not always) convey mineral rights, water rights or other special kinds of rights.

2. A deed is a physical document that conveys the title

A deed is a document that proves ownership and is used to transfer property from the seller to the buyer.

For deeds to be considered legal, valid, and enforceable, they must contain the following components:

Deed vs. Title: 8 Things You Should Know in 2023 (6)Identification of both grantor(s) and grantee(s)

Deed vs. Title: 8 Things You Should Know in 2023 (7)Expression of the grantor’s desire to convey the property to the grantee

Deed vs. Title: 8 Things You Should Know in 2023 (8)An accurate legal description of the property

Deed vs. Title: 8 Things You Should Know in 2023 (9)The signature of the grantor(s)

So, in essence, the deed is the document that transfers title from one owner to the next.

Because the deed conveys rights, it’s important to resolve any outstanding issues before the property is legally transferred to you.

This way, you can enjoy your new property without fear of future complications.

3. There isn’t just one kind of deed

There isn’t a one-size-fits-all deed for every situation.

Instead, there are a few main types of deeds.

We’ll walk you through the ones you should know.

Deed vs. Title: 8 Things You Should Know in 2023 (10)General Warranty Deed:

This type of deed is most often used in traditional home sales.

It provides the most protection for people buying your home.

It means that the seller is guaranteeing the property is free and clear of any issues.

It also says that your guarantee, as the seller, covers the life of the property (not just the period you owned it) and that you will defend the title against other people who may claim to have an ownership interest in it.

Deed vs. Title: 8 Things You Should Know in 2023 (11)Special Warranty Deed:

This deed is similar to the General Warranty Deed above.

However, it only promises a clear title for the time that you, as the seller, have owned the property.

This type of deed is generally used in commercial real estate transactions.

You may also hear it called a Covenant Deed.

Deed vs. Title: 8 Things You Should Know in 2023 (12)Grant Deed:

This deed shows that you have a clear title to sell and no knowledge of anything that may impact the title.

However, it does not include the warranty that will defend the title against other people who may end up having claims to it after the sale occurs.

Deed vs. Title: 8 Things You Should Know in 2023 (13)Quitclaim Deed:

This deed offers the least amount of protection for a buyer of your home.

It’s typically used when a property owner gifts property to someone else.

It’ll transfer rights and ownership to the buyer without any guarantee that the seller is actually able to do so.

Even if the seller is not able to legally sell the lot, the buyer wouldn’t be able to take any recourse against the seller.

Deed vs. Title: 8 Things You Should Know in 2023 (14)Bargain and Sale Deed:

If your property is sold in a tax sale or a foreclosure, then it may be sold with a Bargain and Sale Deed.

This occurs when the seller doesn’t need to clear the title, and there are no protections for the buyer.

The buyer will be responsible for cleaning everything up after the fact (even if there are liens or other outstanding encumbrances).

4. You should also understand the abstract of title

The title is a concept rather than a document (that’s where the deed comes in).

That said, material facts related to a property’s title may be documented in the form of an abstract.

Think of it as a summary report of what is found in the public record.

It helps you track your property’s legal history and past chain of ownership.

The abstract of title often includes a summary of the original grant, subsequent changes in ownership, and any encumbrances on the property.

The person who prepares the abstract of title will also include a statement that the abstract is complete and accurate.

While it’s important to know that the abstract of title exists, most property owners will just keep it on hand.

It’s often a thick stack of paperwork that will be stored in a filing cabinet “just in case.”

5. When purchasing a property, it is your responsibility (as the buyer) to find evidence of title

Finding evidence of title means that you can show the seller is able to convey with a marketable title.

This is usually done by means of a title search.

A title search will trace the chain of title back through the public record.

The goal of this process is to find out if any defects exist.

After all, if the seller of the property cannot provide a marketable title, then your contract (as the buyer) should become void and your deposit should be returned without penalty depending on the details of your purchase agreement.

During this process, you, your real estate attorney or title company should look beyond recorded documents like deeds, utility easements, mineral leases, or mortgages.

You should also look into certain types of liens that may not be recorded (i.e. real estate taxes, inheritance taxes, etc.).

Be careful because a title search may also overlook other issues, such as encumbrances, on the seller’s ownership that were not recorded.

6. Title insurance can protect you from title defects

Title insurance protects buyers from any hidden or unknown title defects.

You’ll purchase it for a one-time cost prior to the property sale.

In most cases, lenders will require you to have it to protect their interests.

Title insurance is unique because – instead of protecting against future events – it protects against past events that could impact your real estate title.

Here are some events that could affect your title.

Deed vs. Title: 8 Things You Should Know in 2023 (15)Ownership or disputed ownership by another party

Deed vs. Title: 8 Things You Should Know in 2023 (16)Judgements against the property (lawsuits or liens)

Deed vs. Title: 8 Things You Should Know in 2023 (17)Forgery or fraud

Deed vs. Title: 8 Things You Should Know in 2023 (18)Unresolved building code violations

Deed vs. Title: 8 Things You Should Know in 2023 (19)Back taxes

Title insurance comes in “standard” and “extended” coverages.

As you would expect, “extended coverage” offers more protection.

You may want to ask your lawyer which type to purchase.

If the seller has title insurance, then it should indicate to you that the title was good enough for insurance purposes when the seller purchased the property.

Then, get a quote from the insurer who issued the seller’s property.

In most cases, it’ll be the cheapest premium.

7. An owner’s policy is different from a lender’s policy

If you are buying a property with a mortgage, your lender will likely require that you purchase title insurance.

However, despite what you may think, the title insurance policy that the bank will request does not protect you as the buyer.

A Lender’s Policy is issued for the amount of the mortgage and will only protect the lender (not you) from financial damages if a title issue shows up after purchase.

So, if you want to protect your interest in the property, you will also need to purchase an Owner’s Policy (for an additional fee).

This policy will protect you, as the owner, from previous title defects for the length of your ownership regardless of the status of your mortgage.

The good news is that in some states the seller pays for the Owner’s Policy.

8. You should be aware of any title exceptions

If you purchase title insurance, you need to be aware of any “title exceptions,” which are specific items not covered by the policy.

Unfortunately, not all title defects are insurable.

So, you should be aware of all title exceptions because they will be excluded from coverage.

And the presence of a title exception can often mean that something isn’t right with the title.

These exceptions will indicate that the seller wants to sell the property and transfer the problem to a new owner.

Don’t fall for it!

Final thoughts

When it comes to deed vs. title, both are highly important in the real estate process.

The two terms are closely connected, but different in practice.

A title is a concept that refers to the ownership of a property.

Titles are transferred by a deed, which is the physical legal document that is given from the seller to the buyer.

It will be signed by the person selling the property rights.

Additional Resources

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Deed vs. Title: 8 Things You Should Know in 2023 (23)

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Disclaimer: we are not lawyers, accountants or financial advisors and the information in this article is for informational purposes only. This article is based on our own research and experience and we do our best to keep it accurate and up-to-date, but it may contain errors. Please be sure to consult a legal or financial professional before making any investment decisions.

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Erika

Erika is a former Affordable Housing Director for the City of New York turned full-time Land Investor. She used to help New Yorkers find affordable housing, now she helps people find affordable land around the US.

Prior to starting Gokce Capital, Erika received a Bachelor of Architecture from the University of Southern California and a graduate degree in Urban Policy from Columbia University. She worked as both an architectural designer and engineer in New York before joining the New York City Department of Housing Preservation and Development.

Erika currently lives in the New York Metropolitan area with her spouse, daughter and cat. She is originally from Chicago and still considers herself a midwesterner at heart.

Erika also loves to read, write and travel (fun fact, she has visited all 50 states and more than 30 countries!). Her new book, Land Investing Mistakes: 11 True Stories You Need To Know Before Buying Land, is now available on Amazon.

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Deed vs. Title: 8 Things You Should Know in 2023 (2024)

FAQs

Is it better to be on the mortgage or the deed? ›

If you own a house, then you definitely want your name on the deed. A house deed is an important legal document that proves that you are the true legal owner of your house. It gives you certain title rights, such as the right to take out a mortgage, or to buy, sell, rent or transfer the house.

What is the best type of deed to have? ›

A Warranty Deed is the best of the best. It protects you from all future and past issues with property title and any outstanding debts or liens.

Can my girlfriend be on the deed and not the mortgage? ›

Both owners of the home, typically being spouses listed on the deed, do not have to both be listed on the mortgage. Remember that the mortgage does not indicate who the owner of the home is, so not being listed on the mortgage will have no effect on your ownership of the home.

Which deed is most commonly used to clear a title? ›

A warranty deed, which also may be called a general warranty deed, is the type of deed used most frequently when real property is sold. A warranty deed guarantees that the title is free and clear of debts or liens.

What are the disadvantages to being on deed? ›

If you're the buyer in a contract for deed arrangement, you need to be aware of the following risks.
  • Property maintenance. One contract for deed drawback is the uncertainty over who's responsible for what. ...
  • No foreclosure protection. ...
  • Balloon payment. ...
  • Seller retains title. ...
  • Less consumer protection.

What is a major disadvantage to lenders of accepting a deed? ›

Disadvantages to Lender

A lender should also hesitate before accepting a lieu deed where there are outstanding subordinate liens or judgments against the property. In such a situation, the lender will have to foreclose its mortgage, with the attendant expense and time involved to obtain clear title.

What is the most protective deed? ›

General Warranty Deeds: A general warranty deed provides the most protection to the buyer but gives the grantor the highest degree of liability. The grantor of a general warranty deed fully warrants good clear title to the property.

What is the most protected deed? ›

A general warranty deed is the gold standard of property transfers. This type of deed is overwhelmingly used in residential purchases. Most lenders require a warranty deed for properties they finance. It offers buyers the greatest possible protection from future claims against the title.

What type of deed is most secure? ›

General warranty deed

This guarantees the buyer over the property's entire history, meaning it covers acts taken by all previous owners on the title. It's the type of deed that offers the most buyer protection.

What if my partner dies and the mortgage was in their name only? ›

Most commonly, the surviving family who inherited the property makes payments to keep the mortgage current while they make arrangements to sell the home. If, when you die, nobody takes over the mortgage or makes payments, then the mortgage servicer will begin the process of foreclosing on the home.

What if my wife's name is not on the mortgage? ›

There is no law that says both spouses need to be listed on a mortgage. If your spouse isn't a co-borrower on your mortgage application, then your lender generally won't include their details when qualifying you for a loan. Depending on your spouse's situation, this could be a good thing or a bad thing.

Does it matter whose name is first on a mortgage? ›

When evaluating borrowers for a joint mortgage, the lender cares less about who is listed first, and more about the sum of the applicants' earnings and debts. In general, the lender evaluates the application the way the applicants submit it, without regard to whose name is listed first.

What would cause a deed to be void? ›

The deed did not meet the written requirements (such as if it failed to accurately describe the property); The deed was forged; The deed was induced by fraud, misrepresentation, coercion, duress, or undue influence; The deed was not delivered, or not delivered properly, and there was no acceptance by the grantee.

Which deed transfers the least title? ›

Quitclaim Deeds

This is because a quitclaim deed offers the lowest level of protection.

Why is the deed the most important document at closing? ›

The Deed: public record of the ownership of the property

It often includes a description of the property and signed by both parties. Deeds are the most important documents in your closing package because they contain the statement that the seller transfers all rights and stakes in the property to the buyer.

Is a deed worthless if not recorded? ›

Recording the Deed

If the deed is not recorded, the party holding the deed may not be recognized under the law as the legal property owner to third parties, though the deed may be legally effective to transfer the property from the grantor to the grantee.

What are the advantages of a deed? ›

It is a legal safeguard against future arguments for the property's ownership. The deed is a very useful document, especially in a dispute. Transactions under the Sales Deed protect against unexpected entry into the home. It also provides a legal way of selling the home to a new owner.

What is an alienation clause? ›

An alienation clause, also known as a due-on-sale clause, is a real estate agreement that requires a borrower to pay the remainder of their mortgage loan balance off immediately during the sale or transfer of a property title and before a new buyer can take ownership.

What deed type gives you the least risk of ownership? ›

General warranty deeds provide the highest level of buyer protection, while quitclaim deeds typically provide the least.

Which deed would be most advantageous for a grantor? ›

As one of the most secure types of deeds, general warranty deeds are used in most real estate title transfers. General warranty deeds provide guarantees that the grantor has the right to sell the property and that the grantee will be receiving a title that is free of debt, claims, or other legal encumbrances.

Why do lenders prefer a deed of trust? ›

A deed of trust can benefit the lender because it typically allows a faster foreclosure on a home. Most deeds of trust have a “non-judicial foreclosure” clause, which means that the lender won't have to wait for the court system to review and approve the foreclosure process.

What is the least protection of any deed? ›

Quitclaim Deed – provides the grantee with the least protection; it contains no promises or warranties, and only conveys whatever title and interest the grantor has.

What is the highest level of deed? ›

The seller uses the warranty deed to prove to the buyer that they have the right to sell the property. As a homebuyer, a warranty deed is the gold standard. It offers the greatest level of protection because you'll have peace of mind knowing that no other entity has a legal claim on the property.

What is the most popular deed? ›

General warranty deed: A general warranty deed is the most common type of deed used to transfer fee simple ownership of a property.

Where is the best place to keep property deeds? ›

A high-quality fire-proof document safe is the best option for keeping your title deeds safe at home. You should choose a safe that can protect paper documents against fire damage for at least one hour, as well as thieves.

Which title in real property has the most rights? ›

Legal title is the only title that can do this. Legal title has the advantage over equitable in that it allows the legal titleholder to demand compensation from parties that purchase or lease the property.

What happens if my husband dies and my name is not on the house? ›

What If the Surviving Spouse Isn't on the Deed? If one spouse dies and the surviving spouse is not named on the title to the house, then the property will pass through the decedent spouse's estate--either through a will or intestate succession.

Can you inherit a house that still has a mortgage? ›

Can you inherit a house with a mortgage? Yes, you can. The home can be left to you as part of the deceased individual's will or, if the person died intestate, you may inherit the home as a result of a court distributing the deceased individual's estate.

Can you leave a mortgage in a deceased person's name? ›

The general rule is that a mortgage may not stay in a deceased person's name, however exceptions may apply. Generally, if a person dies, title will transfer. If title transfers, it invokes a due-on-sale clause.

What is it called when both names are on a mortgage but not married? ›

Unmarried couples will apply for a mortgage as individuals. This means the partner with the stronger financials and credit score may want to purchase the home to get better mortgage terms and interest rates.

Can both spouses be on the mortgage but only one on the title? ›

Can I have my spouse on the title without them being on the mortgage? Yes, you can put your spouse on the title without putting them on the mortgage. This would mean that they share ownership of the home but aren't legally responsible for making mortgage payments.

What does it mean when someone puts you on the deed? ›

Attorney Practice Note: A deed is an instrument used to transfer ownership (title) to another person. “Adding someone to a deed” means transferring ownership to that person.

Whose credit score is used on a joint mortgage? ›

On a joint mortgage, all borrowers' credit scores matter. Lenders collect credit and financial information including credit history, current debt and income. Lenders determine what's called the "lower middle score" and usually look at each applicant's middle score.

Can you add someone to your mortgage without refinancing? ›

Adding a co-borrower requires refinancing.

You can't add a co-borrower without refinancing your mortgage. It allows you to change the terms of your home loan and add or remove names from mortgages. A mortgage can change the interest rate, payoff date, monthly payment, and name.

What does it mean if your name is on the deed? ›

If your name is on a deed to a house, then that means that you are the property owner. Having your name on a deed means that you have property title, which represents a set of rights you have as a homeowner.

What is a dirty deed? ›

an intentional act, especially a very bad or very ... See more at deed. (Definition of dirty and deed from the Cambridge English Dictionary © Cambridge University Press)

What are the basic requirements of a valid deed? ›

DEEDS IN GENERAL

It must be in writing; 2. The parties must be properly described; 3. The parties must be competent to convey and capable of receiving the grant of the property; 4. The property conveyed must be described so as to distinguish it from other parcels of real property.; 5.

What voids a deed intended to convey property? ›

Code §1600). A deed conveying real property may have been recorded but not delivered and a court could deem the conveyance void if a party can prove that delivery was not made or that there was no intent to unconditionally convey title at the time the deed was delivered.

Which deed creates the least liability? ›

The deed that creates the least liability for the grantor is the: Quitclaim deed.

Which of the following is not essential to a valid deed? ›

Acknowledgement and recording are recommended but are not essential to validity of deed.

What type of deed conveys the most rights? ›

General warranty deeds give the grantee the most protection, special warranty deeds give the grantee more limited protection, and a quitclaim deed gives the grantee the least protection under the law.

What are the two purposes of a deed? ›

What are the two main purposes of a deed to real property? Convey ownership and prove ownership of real property.

Which type of deed would be the best to convey? ›

A General Warranty Deed provides the greatest assurance and protection to a Grantee (or Buyer). When a General Warranty Deed is used in the sale of a property, the Grantor (or Seller) is providing a warranty of title and conveyance of a property free and clear of any outstanding liens, debts or other encumbrances.

Why is a deed of trust better than a mortgage? ›

Whereas a mortgage only involves the lender and a borrower, a deed of trust adds a neutral third party that holds rights to the real estate until the loan is paid or the borrower defaults.

Can my dad put his house in my name? ›

If you and your parents determine that putting their house in your name is a good idea, there are two main ways to proceed. Both involve changing the legal ownership of the house by recording a new deed.

Should my husband put my name on the deed? ›

One good reason to add a spouse to the deed of your home is for estate planning purposes, which may allow the property to transfer to your spouse outside the probate process, depending on the transfer language utilized in the granting clause. Another reason is for creditor purposes.

Does it matter whose name is on the house? ›

Who's going to get the house? Well, it's kind of a trick question because it doesn't matter. It doesn't matter whose name is on the deed or whose name is on the mortgage. Nine times out of 10 what matters is when the house was purchased and with what type of funds it was purchased.

Am I entitled to my husband's property if he dies and my name isn't on the deed UK? ›

If you and your partner were married, then your marital home passes to you automatically in law even if you weren't named on the mortgage.

How many names can be on a mortgage? ›

There is no legal limit to how many people can be on a mortgage, but your lender may have restrictions in place. Remember that everyone on the loan also has to be able to qualify for it to be approved, and some lenders may see a big group of names as a potential risk.

Can you add a name to a mortgage? ›

Most types of home loans will only allow you to add one co-borrower to your loan application, but some allow as many as three. Your co-borrower can be a spouse, parent, sibling, family member, or friend as an occupying co-borrowers or a non-occupying co-borrowers.

What is the disadvantage of a deed of trust? ›

If your circumstances change any you are no longer able to make your payments, your Trust Deed may fail and you will still be liable for your debts or even forced into bankruptcy.

Which deed is the best in real estate? ›

General Warranty Deeds: A general warranty deed provides the most protection to the buyer but gives the grantor the highest degree of liability. The grantor of a general warranty deed fully warrants good clear title to the property.

Why would someone use a deed of trust? ›

A Deed of Trust is an agreement between a borrower, a lender and a third-party person who's appointed as a Trustee. It's used to secure real estate transactions where money needs to be borrowed in order for property to be purchased.

What happens if your husband dies and your name isn t on the house? ›

What If the Surviving Spouse Isn't on the Deed? If one spouse dies and the surviving spouse is not named on the title to the house, then the property will pass through the decedent spouse's estate--either through a will or intestate succession.

Can a mortgage stay in a deceased person's name? ›

The general rule is that a mortgage may not stay in a deceased person's name, however exceptions may apply. Generally, if a person dies, title will transfer. If title transfers, it invokes a due-on-sale clause.

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