When you decide to buy a house or start hunting for homes for sale in South Philadelphia, you’re not just making a major life decision — you’re also agreeing to learn a whole new language! Indeed, the real estate industry is rife with jargon and confusing terms. Two such terms are “house deed” and “title.” Many homebuyers recognize these terms as related to homeownership but find it challenging to distinguish between them. If you’re feeling confused about the difference between house deeds and titles, don’t worry! Our real estate professionals are here to clear things up.
What’s a House Deed?
A deed is a legal document signifying the transfer of ownership from one person to another. In a real estate transaction, the property deed must include descriptions of the property and needs to be signed by both the grantor and the grantee. Who are the grantor and grantee? The person transferring ownership of the property is called the grantor (otherwise known as the seller), while the person taking possession of the property is called the grantee (or the buyer).
There are a few different types of deeds. Which one you choose will depend on your specific situation. Here’s a brief overview of each type:
- General Warranty Deed: This deed is prepared by a mortgage company and protects the buyer during a transaction. The seller must have full title and rights to sell the property and cannot have prior knowledge of property damage, outstanding debts, or liens. If at a later date, issues are discovered that the seller didn’t disclose, the buyer can sue the seller for damages.
- Specialty Warranty Deed: A specialty warranty deed offers less protection to the buyer. It will protect them in the event there were liens or encumbrances placed on the house when the seller owned it, but it does not offer any assurances in the case there were encumbrances from previous owners. This type of deed is usually reserved for commercial real estate.
- Bargain and Sale Deed: This type of deed is used for a real estate transaction involving a foreclosure or tax sale.
- Quitclaim Deed: This deed is used when the property owner transfers the title of ownership to another person without transferring money. Quitclaim deeds are typically reserved for transactions in which parents pass property to children or a spouse transfers ownership to their partner.
What Is a Title?
While a house deed is a written document, a title refers to a person’s legal ownership of a property. This means you will have full control and responsibility over that home. While a title isn’t tangible, it comes with an abstract of title, which is a document describing the property, previous owners, and past encumbrances. Before finalizing a sale, your title company or real estate attorney will help you perform a title search to ensure you’ll have full legal ownership of the house.
How Are Deeds & Titles Different?
Now that you know what house deeds and titles are, you’re likely seeing the differences between the two. However, if things are still a little murky, here are a few ways to differentiate these real estate terms in your head:
The Physical Differences
Perhaps the biggest difference between house deeds and titles is the physical component. A property title is a concept describing your right to ownership, as there is no physical document (although there is an abstract of title). In contrast, a property deed is a legal, written document that confirms your ownership.
A title grants you legal ownership over a home, giving you the right to possess, control, and enjoy that property. A deed is physical proof of that ownership.
The property title and deed are used in the home closing process. A title search must be conducted before the closing to guarantee the seller has full ownership of the home and the legal rights to transfer ownership to the buyer. Once the deed is signed, the seller no longer has rights to the property because the title has moved to the buyer.
The McCann Team Guides Buyers Through the Homebuying Process
Since both a house deed and title play a crucial role in the homebuying process, it’s a good idea to understand the difference between the two. We hope this guide helped you understand that a title is a concept of ownership while a deed is a physical, legal document showing this ownership.
If you’re interested in buying a house, you need a team of real estate agents who can clarify confusing terms and help you navigate the entire homebuying process — from house hunting to closing. That team is The McCann Team. Our realtors are industry experts and highly trusted by Philadelphia residents. We’ll help you find and secure your dream home. Contact us today to start looking at homes and condos for sale in Center City, Philadelphia, and the surrounding neighborhoods.