Real Estate Deed Vs. Title, What is the Difference?

In the world of buying and selling real estate, ownership transfer is at the center of it all. All the time-sensitive rules and regulations, along with the terms and jargon can be too much for homeowners and potential buyers to sort out. Two such terms are “deed” and “title,” and we’re often asked to explain the difference between the two.

In this article, we’ll break down the differences, the power they hold, and how to ensure legal standards are met.

What’s the Difference Between a Deed and a Title?

The biggest difference between a deed and a title is that one is an actual, tangible object, and the other is an abstract concept.

A deed—the tangible document—transfers ownership from one person to another. This document contains language to indicate that it’s a deed and names the new responsible party or parties. After the transfer happens, the new ownership is recorded with the county in which the property is located.

The title, on the other hand, is the concept that indicates who holds the power to enter, use, alter, and sell a property. Think of it as a title, of another sort. A person can hold the title of “president” of an organization, which accords certain rights and responsibilities, another abstract concept. Being the title holder of a piece of property works similarly: when a deed is in your name, you have interest in and authority around the property.

If a Title Isn’t an Actual Object, Why am I Required to Pay a Fee for It?

The lenders involved in a real estate transaction want to be sure there are no obstacles to impede the clear and clean transfer from a previous owner to the buyer. To accomplish this, a title search is done. The fee that’s charged covers the cost of the search. A title ready to be transferred is often called a “clear title,” meaning there are no possible other claims (from other people or entities) to that same title.

Title searches also benefit the buyer by bringing to light possible problems with the deed, giving a chance to remedy them before the sale closes. Below are the kinds of problems—or “defects”— that can be found in a title search. This means the title might not be clear, and ready for transfer.

• Easements—These are rights, by a third party, to access the property. For example, a city utility company could have an easement on a property, giving them access to the property’s utility infrastructure for future improvements or repairs.
• Liens—These could be placed on a property by a construction company or a mortgage company, for example, who is still owed money by the owner the property is transferring from. The lien ensures that they will be paid off from proceeds of the sale.
• Clerical errors—These are simply mistakes made by employees when entering data, like an incorrect tax lot number or address.
• Boundary disputes—These arise when a neighbor of the property being sold claims a boundary line that crosses over into said property. This calls for a re-survey to establish the lines of ownership.

All of these potential title “defects” mean there might be someone else who can claim a right to the deed in question and it is not clear, or at least not clearly defined.

What Makes a Deed a Legal Document?

Property deeds are also known as General Warranty deeds, which are legal documents that serve two purposes: 1) to legally describe the property being transferred, and 2) to name the transfer of ownership, the title of ownership, from the Grantor (seller) to the Grantee (buyer).

One thing that makes the deed legal and binding is the special language used to verify that: 1) the Grantor rightfully owns the property and has the power (the title) to sell it, 2) the Grantee has the legal capacity to take on ownership, and 3) the title is clear of defects, liens, and other encumbrances, and that additional documents will be provided, as needed.

Another step that makes a deed a legally binding document is the way it’s signed. Oregon law requires that deeds must be signed by both the Grantor and Grantee with a Notary Public and then submitted to the County Recorder’s Office for official recording. Often real estate agents wait to celebrate a sale until it is “recorded with the county,” and don’t consider a property sale complete until that occurs. The property is not yet sold until it is recorded.

How can you Protect Yourself as a Buyer or a Seller From Title or Deed Errors?

Errors can still occur during title transfers, even with the clearly stated protocols and laws mentioned above. Having an experienced real estate on your side during your transaction can help ensure that the transfer goes smoothly. In our almost twenty years in real estate in the Portland metro area, we’ve helped close thousands of deals. Because we’ve worked closely with the best title companies in the area, we know the fine points of real estate transactions. We can put your mind at ease and will look out for your best interests from start to finish. Give our top 1% seller’s agents a call today at 503-714-1111, contact our top 1% buyer’s agents at 503-773-0000, or chat with the bot on our site.

AUTHOR

Stephen FitzMaurice

Stephen FitzMaurice, Realtor is a top 5% real estate agent in the U.S. A Principal Broker in Oregon, Managing Broker in Washington, he has been licensed since 2003 for residential real estate sales. Call his team in Oregon at 503-714-1111 or in Washington at 360-345-3833.

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