Know your closing terms: What's the difference between a title and a deed

When it comes to property ownership, people sometimes mistakenly use the terms “deed” and “title” interchangeably.

While both of these terms refer to ownership of a property, there are important differences that anyone buying or selling should know going into the closing process.

What is a deed?

A deed is a tangible document that shows who owns a piece of property. It is used to transfer property from one party to another. When a home is sold, the seller will sign the deed to confirm transfer and then delivers the deed to the buyer, either at or after closing. The original deed also gets filed with the local town.

What is a title?

A title is a legal term that refers to ownership of a home and the owner’s legal rights to control and use the property. (It helps to think of the word, “entitle,” because the title indicates an owner is entitled to.)

The title enables someone to sell a home or transfer. Unlike the deed, it is not a physical document, but an abstract concept that indicates who holds the rights to a property.

Title Searches

The title includes a property’s ownership history, including all past transfers, uses, and restrictions. When someone buys a home and receives title, they become responsible for whatever is on the land record. This is why it’s important that buyers perform a title search prior to closing to check the history of your title and identify any unresolved issues.

A title search will also determine whether the seller has a “clear title,” meaning they have the right to transfer the property.

How deeds and titles fit into the closing process

To conclude, let’s look at how titles and deeds both fit into the closing process.

During the closing process, a title search will be ordered to examine public records that affect the ownership (title) of the property. If the seller has clear title, the closing can move ahead and documents will be prepared. The deed will be included in these documents, and the seller will sign the deed to finalize the transfer.

Need help navigating a home purchase?

At Pederson Real Estate Law, attorney Charlene Pederson has over 25 years of experience guiding Connecticut clients through residential real estate transactions. If you need an experienced, attentive attorney for your closing, reach out today for a free consultation.