As you approach closing day for your home purchase, you’re going to hear a lot of discussion about the deed and title of your property. Both are an important part of owning real estate, but it can be hard to distinguish between the two. Here’s what you need to know about the differences between the deed and title in real estate.
What Is a Deed?
A deed is a document that shows a change in ownership has occurred in a sale. It’s “the physical representation of the transfer of ownership,” says Kendall Bonner, a licensed Florida attorney and broker and owner of Re/Max Capital Realty in Lutz, Florida.
The deed will state the names of both the seller and buyer of the property, and must have the signature of at least the seller of the property to confirm the transfer of ownership. Some states include space for both the buyer and seller to sign, while others only require the signature of the seller, Bonner says.
Deeds are filed as a part of public record with the city, county or state, and are often accessible online through a local tax assessor’s office. However, depending on where you live, a deed can still be considered valid without being filed as a part of public record.
What Is Title?
Title, on the other hand, is not a document but the actual right of ownership.
“Title is going to determine who has the power to transfer and/or use the property, and how that property is owned,” Bonner says.
Because title is the ownership of the property itself, homebuyers and lenders can purchase title insurance to protect against claims of ownership by other parties. Robert Treuber, executive vice president of the New York State Land Title Association, explains that challenges to title can come from unpaid property taxes or a mortgage, child support liens, the relative of a deceased owner claiming to have inherited the property or in cases of fraud, among other scenarios. Prior to a real estate closing, the title insurance company will search the property’s history to see if there are unresolved claims of ownership.
What Is the Difference Between Property Title and Deed?
Title, as a concept, and the deed, as a document, coincide as both the right to and physical representation of property ownership.
However, different types of deeds can mean different things regarding title and whether there are known claims to ownership beyond the transaction taking place. Additionally, discrepancies in the history of a home’s title can lead to necessary adjustments in the deed or even postponement of the closing of the deal.
Different Types of Deeds
Depending on the nature of the transaction and the history of the property, the deed showing your home purchase or sale could vary. Here are the most common types of deeds:
- General warranty deed.
- Special warranty deed or grant deed.
- Quitclaim deed.
- Bargain and sale deed.
General warranty deed. A general warranty deed is the most common deed you’ll come across in a standard home sale. “It’s the one that provides the most and best protection to the buyer,” Bonner says. Title companies use this deed in transactions when it can be confirmed that ownership of the property is free and clear of discrepancies, liens or any other issues. It also shows the buyer that the seller is the correct owner with rights to sell the property.
Special warranty deed or grant deed. A special warranty deed, which may also be called a grant deed, is still used with title insurance, but it offers limited guarantee of unencumbered ownership. With a special warranty deed, the title company is able to confirm that the seller did not endure any ownership discrepancies or encounter other ownership issues, but the title company is not able to make the same guarantee prior to the seller’s purchase of the property. Bonner explains that special warranty deeds are often used for new construction properties in a larger development, where the parcel of land hasn’t previously existed on its own, so title guarantee is harder.
Quitclaim deed. A quitclaim deed, which title insurance companies don’t use, is a simple deed often used when an individual transfers ownership of a piece of property to a person she knows. These deeds can be drawn up by an attorney or even by the seller, and they offer no guarantee that the noted seller holds title of the property. For this reason, quitclaim deeds can be a problem, as Bonner notes: “Unfortunately, there is fraud associated with quitclaim deeds.”
Bargain and sale deed. Like a quitclaim deed, a bargain and sale deed does not offer any protections over title of the property. This type of deed is often used in a foreclosure auction or bank sale of a piece of real estate, and the nature of the deal makes it harder (if not impossible) to guarantee that there are no other claims of ownership. If a lien or claim of ownership is revealed following a bargain and sale deed transaction, it’s on the new owner to resolve the issues.
To protect your rightful ownership of the property, title insurance is considered a valuable part of the homebuying process – and when your purchase is financed with a mortgage, it’s often a required step by the lender.
“To minimize the potential for claims, title agents or title insurance companies conduct extensive research prior to writing the policy,” Treuber wrote in an email. “This research includes establishing the legitimate chain of title for 40 years or more, confirming that prior mortgages were satisfied of record and any liens or other burdens on the property … were cleared and pose no claim to the property.”
When a title discrepancy is found, the title insurance company will defend the policy holder in court and possibly pay off the claim. There are two types of title insurance policies, however: the lender’s policy and the owner’s policy. If you only purchase the required lender’s title insurance to be approved for your mortgage, the title insurance will protect your lender in a discrepancy, but not you. A separate policy will better protect you from fraudulent claims to title, preexisting liens or other issues that come up.
Ensure a quick sale.
Selling your home quickly not only allows you to move on with your life, it also means fewer days of keeping your home in pristine condition and leaving every time your agent brings prospective buyers for a tour. According to real estate information company Zillow, the best time to list a home for sale is on a Saturday between May 1 and 15; homes listed during those times sell six days faster and for 0.7% more than the average annual home price. But how fast your home actually sells, and at what price, depends on factors beyond timing. Here are 10 secrets to selling your home faster, no matter when you list it.
Updated on March 20, 2020: This story was published at an earlier date and has been updated with new information.Pick a selling strategy.
Pick a selling strategy.
Before putting a for sale sign in your yard, it's important to pick the selling strategy that will work best for you. The for-sale-by-owner option may be best if you feel confident in your ability to market the home and negotiate. If your time is better spent on other details, a real estate agent could be best. If you need to sell the home quickly, you may want to inquire with an iBuyer, an entity that can make the deal close faster than the typical homebuyer. You should feel confident in the selling strategy you choose, and avoid switching from one to the other while your house is on the market. Buyers could be turned off by the constant changing of circumstances.Invest in a professional photographer.
Invest in a professional photographer.
According to NAR's 2019 Profile of Home Buyers and Sellers, 44% of recent buyers started their search online. Of those, 87% found photos very useful in their home search. If your listing photos don’t show off the features of your home, prospective buyers may reject it without even taking a tour or going to the open house. Hiring a professional photographer and posting at least 30 photos of your home, inside and out, is a good way to attract buyers. Photography is often free for home sellers, as shoots are often conducted at the expense of real estate brokers as part of marketing the property.Clean everything.
(People Images/ Getty Images)
Nothing turns off buyers like a dirty house. Hire a company to deep clean if you can’t do it yourself. “When the (home) is on the market, no matter what time of day or night, it should be clean and neat,” says Ellen Cohen, a licensed associate real estate broker with real estate brokerage Compass in New York City.
Key places to clean while your home is on the market include:
- Kitchen countertops.
- Inside cabinets and appliances.
- Floors and room corners where dust collects.
- Bathroom counters, toilets, tubs and showers.
- Inside closets.
- Windows, inside and out.
- Scuffed walls, baseboards and doors.
- Basement and garage.
Depersonalize the home.
Remove all your family photos and memorabilia. You want buyers to see the house as a home for their family, not yours. Remove political and religious items, your children’s artwork (and everything else) from the refrigerator and anything that marks the house as your territory rather than neutral territory. The same goes for any collections such as figurines, sports memorabilia or kids' toys that can make a buyer think less about the house and more about you. Family photos can be replaced by neutral art or removed entirely – just be sure to remove any nails and repair nail holes where any hanging photos used to be.Let the light in.
Let the light in.
People love light and bright, and the best way to show off your house is to let the sunshine in. Open all the curtains, blinds and shades, and turn lights on in any dark rooms. If the natural light situation is lacking in any room, strategically place lamps or light sources throughout to set the mood. And while your house is on the market, open all curtains and turn on lights every time you leave your house for work or errands in case you get word that a buyer would like to tour the space before you get home.Be flexible with showings.
Be flexible with showings.
Buyers like to see homes on their schedule, which often means evenings and weekends. Plus, they want to be able to tour a home soon after they find it online, especially in a hot market where they're competing with other buyers. If your home can be shown with little or no notice, more prospective buyers will see it. If you require 24 hours’ notice, they may choose to skip your home altogether. "That's one less person who gets to see the property," Cohen says. Be ready to leave quickly as well – if you're still cleaning up or hanging around outside when the buyer arrives, it can make for an awkward interaction.Set the right price.
Set the right price.
No seller wants to leave money on the table, but the strategy of setting an unrealistically high price with the idea that you can come down later doesn’t work in real estate. Buyers and their agents have access to more information on comparable homes than ever, and they know what most homes are worth before viewing them. A home that’s overpriced in the beginning tends to stay on the market longer, even after the price is cut, because buyers think there must be something wrong with it. "Pricing correctly on the lower side tends to work much better," Cohen says.Remove excess furniture and clutter.
Remove excess furniture and clutter.
Nothing makes a home seem smaller than too much big furniture. Rent a self-storage container or a storage unit and remove as much furniture as you can. It will immediately make your home seem calmer and larger. Remove knickknacks from all surfaces, pack them away and store the pieces upon which you displayed them. Take a minimalist approach to books, throw rugs and draperies, and clear off your kitchen and bathroom countertops, even removing appliances you normally use. If you can scale down the contents of your closets, that’s even better, because it makes the home's storage space look more ample.Repaint in neutral colors.
Repaint in neutral colors.
A new coat of paint will do wonders to freshen up your home, both inside and out. This is the time to paint over your daughter’s purple bedroom, nix the quirky turquoise bathroom and cover up the red accent wall in your dining room. Busy wallpaper can also turn off potential buyers. Your goal is to create a neutral palette so buyers can envision incorporating their own personal touches in the home. "You just want people to see the space for what it is," Cohen says. Rather than a stark white, consider neutral shades of gray, taupe and cream on the walls.Spruce up the front of your home.
Spruce up the front of your home.
You’ve heard it 100 times before, and it’s still true: Curb appeal matters. You don’t get a second chance to make a first impression. A new or freshly painted front door, new house numbers and a new mailbox can breathe life into your entryway. Fresh landscaping and flowers in beds or in pots also enhance your home’s first impression. Trim trees and bushes, tidy up flower beds, remove dead leaves from plants, clear out cobwebs from nooks near the entrance and pressure-wash walkways, patios and decks. Leave the outdoor lights on, too, because prospective buyers may drive by at night.Here are 10 tips to sell your home faster:
Here are 10 tips to sell your home faster:
- Pick a selling strategy.
- Invest in a professional photographer.
- Clean everything.
- Depersonalize the home.
- Let the light in.
- Be flexible with showings.
- Set the right price.
- Remove excess furniture and clutter.
- Repaint in neutral colors.
- Spruce up the front of your home.
See more Real Estate slideshows:
She has appeared in media interviews across the U.S. including National Public Radio, WTOP (Washington, D.C.) and KOH (Reno, Nevada) and various print publications, as well as having served on panels discussing real estate development, city planning policy and homebuilding.
Previously, she served as a researcher of commercial real estate transactions and information, and is currently a member of the National Association of Real Estate Editors. Thorsby studied Political Science at the University of Michigan, where she also served as a news reporter and editor for the student newspaper The Michigan Daily. Follow her on Twitter or write to her at firstname.lastname@example.org.