What Is the Difference Between Deed and Title?

When selling your house, you’ll have to provide several documents to close the sale. While most are straightforward, the difference between deed and title isn’t clear to everyone.

What’s the difference between deed and title? Too many homesellers and home buyers don’t fully understand these terms. While they are used interchangeably by most, a significant difference does exist. This is important, no matter if you are looking to buy or sell a home in Milwaukee. So, before you agree to sign that contract, let’s first learn the difference between these two documents.

What Is a Deed?

To understand the difference between deed and title, first you must know what these terms mean. A property deed is a legal document that servers as a proof of real property transfer from a seller (granter) to a buyer (grantee). Real property includes not just a house but anything connected to the land, such as additional buildings or even roads. However, a deed isn’t legally operative without the adequate property description, as well as signature and identification of the buyer and seller.

There are a few kinds of deeds, such as quitclaim, general warranty, and special purpose. This can also make them private or official. In short, quitclaim won’t give the buyer too much protection under the law. Special warranty deeds will give them a limited protection. General warranty is the most commonly used one, and it gives the buyer huge legal protection. Official deeds are a result of legal ruling. Private deeds are usually used, and they are an agreement between two individuals or businesses.

What Is a Title?

A title is a legal document that is a proof of ownership of some asset, such as property. A title, however, isn’t tied necessarily to real estate. It can also be a proof of who owns a trademark, intangible property, or even a car. A title shows who owns a property, whether the ownership was obtained by a purchase, inheritance, or in any other way.

Title considers several concepts, most importantly ownership, property occupation or asset possession, as well as right of possession. There are two kinds of title: personal property titles and real property titles. Personal property titles allow a person to sell any property that isn’t real estate. In our case, we’re more interested in real property titles, that serve as means to sell real estate and cars.

 If you plan on selling any real estate, it has to be free of liens or any debts before you can transfer it. In other words, there should be no creditors that own the rights to a part of it. A title has to be entirely clean so you could transfer it to another party. If the title isn’t clean, you’ll likely have issues selling it. Because of this, a title search is always necessary before the sale, and it is performed by a title company that will ensure all debts are paid and that there are no hidden owners of the property.

What’s the Difference Between Deed and Title?

Hopefully, the difference is already much clearer, but let’s summarize everything. A deed is a document that confirms ownership transfer. On the other hand, title is the proof that you, the seller, hold that ownership. A deed needs to be signed during the closing of the sale. This is a legally binding act that means the sale can go on and, finally, be completed. A title isn’t necessarily a document. It is simply a proof that you are the sole owner of the property. In other words, when you sign the deed, a title has been transferred from the seller to the buyer.

How Is This Completed?

Before you sell your property and give the deed to be signed, a buyer’s lender will have to perform a title search of public records. This way, they’ll make sure that you indeed have legal rights to transfer ownership of said property. They’ll want to ensure there are no property disputes, liens, or sometimes even claim possessions against it. If everything is clear, the title will be transferred to the buyer, who will then become the legal owner of the property. For the buyer, it might take a few weeks before the transfer is completed and they become the new legal owner. If this doesn’t happen, contact personnel who did the closing, to see where the potential problem might be.

So, the main difference between deed and title is that deed is the document that transfers the title from one person to another.  

Where Does Title Insurance Come Into Play?

On rare occasions, some issues with title can occur. This includes some legal issues that can be hard to resolve, as well as some missed liens. This is where title insurance comes into play, as it will save the buyer from any possible financial losses that may result from this. A title insurance should be paid by the buyer, as they are the ones that could likely be in trouble if anything is wrong with the title. In fact, many lenders require their borrowers to purchase title insurance before they are approved for a loan.

Do you want to learn more about the difference between deed and title? Or do you want to sell your Milwaukee, Wisconsin house without having to worry about buyers not understanding such terms? Contact Sparks Property Investors LLC today! (262) 288-0580

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