Do You Know the Difference between Deed and Title?

Sam Dodd

Here’s a little tidbit of information that just might help you somewhere along the line through your adventures in real estate and buying your first home. Many people use the terms “deed” and “title” interchangeably. Did you know they are two completely different things?

Deeds are Tangible Evidence

A deed is an actual document you can hold in your hand. It’s genuine evidence of ownership of real property. It’s also what is known as the “document of conveyance.” That means it’s used when real property is transferred from one owner to another. That kind of deed can be transferred as a gift. They can be used for mortgages, leases and property exchanges. A sales deed is only for property sales. Some people refer to a deed as tangible because it’s something you can really hold in your hand.

Title is Abstract – You Can’t See It

Next time you ask someone if they hold the title to their property, remember he or she will never be able to actually show the title. Title is an abstract term – it’s just something we say to make it clear the property belongs to us – but, it’s intangible.

“An owner holds title and proves it by showing the deed,” according to Stringham Schools' Sales Agent's Guide to Real Estate. That's a great way to remember the difference.

There are Many Types of Deeds

Not all deeds are created equal! Different deeds denote different types of ownership/transfer and some offer more protection to the new Duck Creek home buyer and to the seller than others. Here’s a quick rundown of some of the most popular types of deeds used in real estate:

Quitclaim Deed (aka Quit Claim Deed)

If you’re looking for guarantees, this isn’t the property transfer to use. If you want to accomplish a fast transfer, this just might work for you. This deed (remember, a tangible record) can be used to transfer an owner’s whole interest in real estate to another person. It only transfers what the giver owns. If Joe and his sister Jane own equal parts of the family farm, Jane can quitclaim her half to someone she chooses, but only her half. Joe keeps his interest in the property.

This kind of deed is most often used when a traditional sale does not take place. It’s often used in divorce situations where one party signs his or her interest over to the other party. This kind of transfer has no bearing on the mortgage or other financial responsibilities that are attached to the property. If your name is on the mortgage for your new Cedar City home and you quitclaim the title to your ex, you’re still responsible for the mortgage if all you do is quitclaim the property. Sorry.

Want to learn more about this fast, easy way to move property among family members? Or do you need to place property in a trust? Give me a call! I would be glad to walk you through the process.

General or Full Warranty Deed

The general or full warranty deed is most common in Utah and it really offers the most complete transfer of ownership. It also offers the best protection. The full warranty deed offers the following guarantees:

The grantor (person conveying the property) owns it and has the right to sell it.
There aren’t any encumbrances on the title that haven’t already been disclosed. There’s nothing to restrict, limit or affect the owner’s rights.
Nobody can come back and legally make third party claims against the title or deed.

If somebody does come back and make a claim against the title, the grantor (seller) will do anything necessary to clear the title.

If anyone does make a rightful claim against the property, the grantor will pay to defend the grantee’s rights. This is a warranty forever and if the grantee loses a battle for the property, he can sue the grantor for the value of the land at the time of sale. This guarantee is called a “covenant of warranty forever” because it covers the title clear back to the time the patent deed was originally conveyed by the government.

Other types of deeds include:

• Special warranty deed
• Grant deed
• Administrator’s deed
• Executor’s deed
• Sheriff’s deed
• Trustee’s deed
• Gift deed
• Patent deed

We’ll save those for another day! I hope you learned something today! If you have any questions, please reach out and let’s talk.