What is the difference between a deed and a title?

by | Jun 29, 2021 | Real estate disputes |

Buying a home is exciting, but it can also be stressful and confusing. The exciting part is shopping for a new home and dreaming about a new and (hopefully) better future while living there. The stress can come when the buyer and seller negotiate. The confusion can come into play when buyers start submitting all the paperwork. Two of the most critical pieces of paper are the deed and title, which some mistakenly assume are the same.

The deed

The deed physically signifies that the property is transferred from the seller to the buyer. Different states have different rules, but it will list both the buyer and seller and often includes the seller’s signature. There are different types of deeds:

·       General warranty: The most common deed, this includes an accurate listing of the owner and that there are no known issues with the title or liens against the property.

·       Special warranty: Also called a grant deed, this often gets used for new construction within a development. It indicates that there are no issues with the specific property purchased, but it does not apply to the development’s status.

·       Quitclaim: This is used for informal transactions that may involve family members or friends. It does not use a title company and, therefore, comes with no guarantees.

The title

The title signifies ownership of the property. The titleholder has the authority to make decisions regarding the property, and they are also responsible for any issues involving the property. Title insurance is a standard tool that comes into play when buying a property because it protects the buyer (and lender) from potential title problems. Lenders may insist on title insurance as a condition for the loan.

These can be sources for a dispute

As with other contract disputes, problems or discrepancies with a deed or title can scuttle a real estate transaction or lead to legal action. Buyers and sellers can avoid conflicts or enforce the conditions of the contract by working with an attorney who specializes in handling these matters.