The term deed and title often get confused for being the same thing. While they are similar, they actually have two different meanings.
Let’s start by covering what a deed is.
A deed is a physical document that is signed to transfer the ownership of an asset, most commonly used in the transferring of property.
In real estate, a deed transfers a title, the legal ownership of a property, from one party to another.
So, are a deed and a title the same thing? Not exactly.
The biggest difference between a title and deed is that one is a physical document and one is a concept. While a deed is a signed document that can be held in a person’s hand and should say who is the owner of a property, a title is the concept of that person’s ownership.
Let’s look at this from a different angle.
Think about the difference between a deed and a title as you would a book. You can own a physical copy of a book, which would be equivalent to a deed. The title of that book is a concept, similar to that of a title on property. From this perspective, a title of a book and title in real estate are both concepts.
Let’s explain this a bit further.
A title gives a party the legal right to own and sell a property. When an individual holds the title of a property, that means that they own it, can sell it, and use it in any way they please under the zoning restrictions.
The term ‘title’ is commonly used in reference to a ‘title search’. A title search is a search of public records for information such as deeds, liens, mortgage, wills, and divorce settlements that would affect the title (ownership) of a parcel.
Let’s shift our attention back to a deed.
Because a deed is a written document, all deeds are going to include certain components. Every deed will include:
- A description of the property, including the property lines
- The name of the seller, called a grantor
- The name of the buyer, called a grantee
To make a deed official, both the transferring party and receiving party must sign the deed.
The purpose of a deed is to provide evidence that a title has transferred from one party to another. It shows who has the right to the title of a given property. In other words, who has the ownership rights.
To recap, a deed is a legal document whereas a title is the concept of ownership of a property.