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Property Deed vs Property Title: What’s the Difference?

Property deed and property title are each important pieces in the home-buying puzzle.

Welcome Homes
/ Jan 20, 2022 / 5 min read
When building a home, you might hear the phrases “property deed” and “property title” being thrown around. Although the names sound similar, they’re different and should not be used interchangeably.

A deed is a physical asset. It’s an official document that transfers ownership of a property from one party to another. A title, on the other hand, is conceptual. It represents the rights that a deed grants to a new property owner.

What is a property deed?

A property deed is a written, legal document that transfers ownership of real property, with real property defined as land and anything attached to it, whether a road, commercial building, or home. This transfer takes place between a grantor (the seller) to a grantee (the buyer).

For a property deed to be legal, it must:
  • Be written—you can’t have a verbal property deed
  • Clearly identify the buyer and seller
  • Describe the property being sold
  • Include the signature of both parties
  • Be delivered to and accepted by the buyer/grantee
Both parties also need to possess the legal capacity to make such a decision.

Property deeds are generally classified as either official or private. Official deeds are verified through court or other legal methods, where private property deeds are handled by the individuals or businesses themselves.

READ: Understanding Property Liens

What are the different types of property deeds?

Property deeds break down even further into various categories based on the title warranty or level of protection to the buyer:

General Warranty Deed
With a general warranty deed, the seller lists a series of legally binding promises and warrants to the buyer (and their heirs, if applicable). The promises include things like a covenant of seisin, which states that the seller owns the property and possesses the legal right to sell it. Other covenants (the legal term for promises) can include that the title is clean and good; that the property is free of liens and/or encumbrances; or that the seller will provide any documentation needed for a clean transfer of ownership and title.

Special Warranty Deed
When property is transferred with a special warranty deed, the seller is still stating they have the legal right to sell the land, but their warranty only extends for the period of time that they were in possession of the property. In other words, the seller is guaranteeing a clean title while they have owned the property, but any issues that arise because of problems from prior to their ownership are not covered by this deed. In comparison, a general warranty deed covers the entire property history, including the time before the current owner had possession of it.

In a quitclaim deed (or non-warranty deed), the seller provides whatever interest they currently have in the property, with no warranties or promises made that the title is clean or good. This means that if the title has a defect, the new owner has no legal course of action. Although it doesn’t seem like they would be encountered often, quitclaim deeds are used in cases where the seller doesn’t know the quality of the title, or they don’t want any liability.

General warranty, special warranty, and quitclaim are the three most commonly used property deeds. However, there is another type of deed known as special purpose deeds that are used in court proceedings or situations that involve a person acting in an official capacity for someone else (or a business). These deeds typically fall under quitclaim deeds because they offer little to no protection to the buyer. For example, an administrator’s deed is used when someone dies without a will and a court-appointed administrator needs to handle the deceased’s assets.

READ: Property Lines: Everything You Need to Know

What is a property title?

A property title is the legal way of stating property ownership. A title is not a document. Rather it is the conceptual rights that are granted to the owner of land, a building, or a home. 

A property title provides a host of rights to the new owner. Although these rights vary depending on your state and the type of title, general rights include:
  • Possession: You have a legal right to own the property.
  • Control: You can use your property however you’d like (as long as it’s legal). The right of control will also depend on any homeowners’ associations the property is part of.
  • Exclusion: You decide who is and isn’t allowed into your home.
  • Enjoyment: Much like control, you can enjoy your home and property however you’d like. For example, you can plant a garden or put up a fence (as long as your changes adhere to your homeowners’ association rules, if applicable).
  • Disposition: Related to possession, this is the legal right to sell or rent the property. (This right can vary depending on your mortgage and other factors.)
Title is transferred at the same time that a property deed is transferred. A title transfer usually takes place through an escrow or title company. Prior to a sale, these companies or a real estate attorney run a search of the title to ensure it’s legal and that the seller has the right to sell. Title searches also discern the quality of the title, as some properties might have mortgages attached or legal limitations. This information can appear in an abstract of a title, which also lists previous owners.

Title companies also offer title insurance, which protects against any future disputes (such as a contractor hired by the previous owners coming to you for their outstanding bills, or unpaid property tax). Title insurance also provides legal evidence of your rightful ownership.

What are the different types of property titles?

The type of title depends on the number of people involved in the ownership:
  • Sole ownership: A single person owns the property
  • Joint tenancy: Two or more people are legally defined as equal holders of the property; also known as a “co-ownership”
  • Tenancy in common: Although this is another form of co-ownership, any liens on the property must be put on one person and removed before the property can be sold. (In a joint tenancy, all parties are involved in the financing.)
  • Community property: Typically for married couples, it allows either person to sell the property.

What is a defective title?

As with any large financial purchase, there are responsibilities inherent in being a homeowner. A defective title means that one or more of the following exist against it:
  • Lien: Legal right against your property, i.e.,  you’re behind on your mortgage payments or property taxes
  • Easement: Portion of land owned by someone other than the homeowner, i.e., a utility company owns power lines that cross your property
  • Encroachment: Neighbor building something on your property, i.e., a fence that crosses the property line
Although property deeds and property titles are legally different, they do go hand-in-hand. You need the property deed to have the title and the rights it affords.

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