When you are purchasing a property, the terms “deed” and “title” will come up a lot.

But what is a deed, and how does it work?

Deeds Are Not Titles

buying a homeIt’s important to remember that deeds are not titles, and titles are not deeds.  The most significant difference between the two is that:

  • A title is a legal term that refers to the legal ownership of a property. They are not physical documents filed on public record, unlike a deed.
  • A deed is the official recorded document declaring legal ownership of a property physically filed in a courthouse or assessor’s office. Titles are transferred via deeds.

Simply put, a deed is proof that you legally own the property while holding its title.

Deeds Are Legal Documents

As mentioned above, deeds are legal documents used to declare the legal ownership of a property. There are several types of deeds, including:

  • General warranty deed: Protects the buyer and ensures that the seller has full legal right to sell the property. It also promises that the seller does not know of any property issues.
  • Special warranty deed: Like a general warranty deed, but this is used for commercial properties and only guarantees the title for the time the seller owned the property.
  • Quitclaim deed: Used when the property is transferred from one legal entity to the next, without the exchange of money. The most common being a parent to a child.

Deeds Describe The Property In Question

In a deed, you will also find information about the property being bought.  It must adequately describe the property and include its legal description, as well as information such as:

  • Property lines
  • Street address
  • Property tax identification number
  • Easement rights

Transfers Ownership From Grantor To Grantee

When purchasing a property, the ownership is transferred from the grantor (seller) to the grantee (buyer).  Deeds are what transfer that ownership and title.  Both parties must sign and the document notarized to make the deed official.

As such, it’s a binding document in a court of law after it’s filed.

Deeds Can Be Researched Before The Purchase Of A Property

Deeds can be researched to put together the history of the property.  Some people may do this to understand the history of a historic home or, most commonly, to research liens, unpaid taxes, and other surprises like an ex-spouse still having rights to the property after the divorce.  Researching will also help you understand how the home’s value has changed over time.

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