Deed vs. Title: Difference Between Deeds and Titles

A deed is a legal document that finalizes ownership of a property being transferred from a seller or grantor to a buyer or grantee. A deed establishes and transfers the legal rights to a piece of property—or a title—from a current owner to a new owner. In a real estate transaction, the deed contains a legal description of a property—including property limits—and must be signed by both the grantor and grantee.

Deeds are typically agreements between two parties—a grantor (the person transferring the property) and a grantee (the person receiving the property), but a third party trustee may be added to the agreement in the event of a deed of trust. In a deed of trust, an intermediary—the trustee—holds the title to a piece of property until the grantee meets a set of terms set by the grantor. All of the parties involved in the transaction must sign the deed in order for it to be legal.

Here is an overview of five different types of deeds.

1. 1. General warranty deed: A general warranty deed assures the buyer that the seller has full title and rights to sell the property, as well as no prior knowledge of any property issues—like property damage, odors, or outstanding debts not otherwise disclosed.
2. 2. Special warranty deed: A special warranty deed guarantees that the grantor holds the right to the property title for the time that they owned the property. This type of deed, also known as the Covenant Deed, is more typical for the sale of commercial properties rather than real estate.
3. 3. Bargain and sale deed: This type of deed is typically used in a sale following a foreclosure or tax sale, in which the seller has not cleared the title and there are no protections for the buyer.
4. 4. Grant deed: A grant deed grants the buyer the full title and rights to sell, but does not guarantee that other claims to the title do not exist.
   
5. 5. Quitclaim deed: A quitclaim deed is used when the title of ownership is passing from one owner to another without the involvement of money. Typical examples of this include parents passing property to children or one spouse granting ownership to their partner. Quitclaim deeds are also used in the event that a legal name change requires a new deed.

A property’s title is the legal right of ownership a person holds to a piece of property or other assets. The title grants a person ownership of the property along with all the rights, including the right to sell. In the case of real estate, the title is transferred from one party to another in the property deed, which is a written document that conveys ownership of a piece of property. Unlike a deed, a title is not a physical document but is instead the rights that a document makes legal and binding.

A title can be difficult to guarantee without a physical document to make it legally binding, which is why a title abstract—a document that provides a historical overview of a property’s ownership—can come in handy. Mortgage lenders will often require buyers to purchase title insurance that protects them from unknown property issues—like disputes over ownership or outstanding debts—before granting a home loan. Homebuyers can also arrange a title search to uncover any limitations on property use such as outstanding payments or encumbrances still attached to the property. The title is deemed a clear title if your search discovers no title defects.

A deed is a legal document stating that the deed holder has legal ownership of a piece of property—or the title to the property—and intends to transfer the property and title to another party. A property title is simply the concept of the homeowner’s theoretical rights to a piece of real property and not a physical document. The deed provides a public record of the property owner's title.

The rights granted by a title can differ depending on a deed. A clear title grants absolute rights of ownership to the title holder, but depending on whether a title search has been undertaken, and how the title is outlined in the title abstract in the deed, the validity of the title represented in the deed can be contested.

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