Deed.. Title.. What's the Difference?

It's important to know the difference when dealing with real estate at any level.

Title Talk,

A title is a legal term that means you own the rights to a piece of property. Although the state may issue a certificate of title, this term refers to the relationship between the titleholder and the property. The described relationship, is the holder's right to use the property. Simply put, it is a collection of rights. These rights typically include the ability to own, control, use, dispose of, and sell the property, as well as transfer the title to another person. It basically means that you can do whatever you want with it, legally of course.

A title may represent a full interest or a partial interest. Full title ownership means the owner accepts all rights and responsibilities and doesn’t share them with anyone. Partial title ownership means you share the property rights with other parties.

Another thing to think about is whether or not the title is clear. You may frequently find liens or levies on a title. These are known as encumbrances. A lien is a claim that allows the lien holder to receive money if the property is sold. This is done to ensure that debts are paid. When you take out a mortgage, the mortgage company places a lien on your property and holds the title until the mortgage is paid off in full. A levy occurs when property is taken to satisfy a debt. A clear title exists when there is sole, undisputed ownership of property and there are no encumbrances.

It should come as no surprise to you that not everyone is truthful and that many mistakes have been made when it comes to titles and transferring ownership. People have attempted to sell properties that they did not own. They may conveniently "forget" to mention that the property is subject to a lien. Perhaps they suspect you won't like the fact that an easement grants the neighbor the right to access your property in order to access theirs and don't tell you. There have also been numerous instances where problems have arisen as a result of previous ownership not being properly recorded. At Terrenacquire we make sure you know all that we do - and that's saying a lot. Being that we go out of our way to know A LOT.

A title search is one method for detecting these types of issues before purchasing a property. ProTitleUSA and U.S. Title Records are reliable resources that provide title searches at reasonable prices. Alternatively, you can go to Spyfly's website, spyfly.com. You can even access the courthouse online or in person, in the county where the property is located and conduct your own free title search.

An abstract of title is a detailed compilation of all documents associated with a specific property that affect the title's status. It is essentially a thorough summary to determine whether the title is free and clear and whether the owner has the legal right to sell the property. If this sounds like a title search, that's because it is. The distinction is that title searches can frequently go back 40-60 years, whereas an abstract of title traces property records back to the point where records are no longer available. Abstracts typically cost $75-$125, though pricing varies depending on the service provider, the value of the property, the complexity of the research, and the time it takes to complete.

Title insurance can benefit lenders, buyers, and sellers alike. Title insurance protects these parties against damages or losses caused by previous events. Liens, easements, encroachments, and inaccurate documents are examples of what this insurance would cover.

The Deed,

A property deed is a written, signed, and notarized document that transfers real estate title from a grantor (seller) to a grantee (buyer). A deed is the tangible evidence of a title and must be properly executed in order to be legally enforceable. A deed, in other words, is the vehicle that transfers ownership from one owner to another. It's supposed to be recorded in land records, usually at the courthouse in the probate or assessor's office, so that everyone can see who owns what and who has rights to it.

There are various types of property deeds because there are various forms of title ownership.

General warranty deed - With this, the seller has the legal right to sell the property to the buyer if the title is clear. The buyer is protected against title defects that span the property's entire history.

Special warranty deed - The seller guarantees the title is clear and has the right to sell the property to the buyer, similar to a general warranty deed. However, this means the buyer is ONLY protected against title defects that occurred while the current seller was in possession of the property..

Quitclaim deed - The seller relinquishes, or "quits," all rights and claims to the property, allowing them to convey to the buyer. Although the seller's legal interest in the property is transferred to the buyer, no guarantees are made as to whether the seller actually owns an interest in the property or whether the title is free and clear.

Trust deed - The title to the property is transferred to a neutral third party whose job it is to hold the title as security or "insurance" for a debt owed by a lender and a borrower. When the debt is completely paid off, the borrower receives the title back.

Tax deed - When a property owner fails to pay the required property taxes, ownership is eventually transferred to a government entity. The government has the legal authority to sell the property in order to collect back taxes and transfer ownership to the new owner.