Real Estate Terms

Title vs. Deed: What’s the Difference?

Title and deed are two incredibly important real estate concepts. The terms are thrown around interchangeably all the time, but they are not precisely the same thing. The average person assumes that deeds and titles are the same things, but they are actually two separate legal concepts.

What Is Title?

Definition: The legal concept of saying you own a right to some form of asset or interest.

If someone has title, that means that they have the right to own something like a house or property. Title might sound like a document or piece of paper, but it actually is not. It’s just a legal concept, not a piece of paper.

Now, as for deeds, things are a little bit different.

What Is a Deed?

Definition: The legal document that transfers title from one person to another, or the written proof of ownership, for some form of asset or interest.

So what does that mean? Well, deeds are the legal documents that transfer title. It is the written document itself that conveys ownership. According to the Statute of Frauds, deeds must be in writing and usually can be found at the county courthouse in which the property exists.

What’s the Difference Between Title and Deed?

Having title is not a physical thing. It’s NOT like a deed where there is an actual paper in the courthouse that says you own the property. No. Title is merely a legal concept of ownership.

See the difference? Deeds, on one hand, are actually the legal documents that transfer title. While having title is the concept of owning the right towards an asset or in our case property.

Now, it’s also worth mentioning car titles and real estate titles are not the same concept. I think this is why the difference is so confusing for people, and people get deeds and titles mixed up in real estate. Because yes, when it comes to car titles, they are a physical piece of paper, but that is not the case for real estate.

How are Title and Deed the Same?

We need both deeds and title because proof of ownership is critical, especially in real estate. Real estate is unique in a lot of aspects, as I’m sure you already know. Obviously, it’s costly, and it has the ability to make people money. Would you want to buy property if you weren’t able to prove you own it? Probably not.

Both deeds and title are simply used to prove ownership of a property, which is why they are commonly mixed up. While someone may ask for a title and is referring to the deed, most people understand what they are talking about. So you don’t exactly need to be a member of the grammar police when you are talking to your clients. It does remain incredibly important to understand the distinction of the two for your real estate exam and, of course, in a professional setting.

What to Know for the Real Estate Exam

Understanding the difference between the two terms is essential come exam day. It is also incredibly important to understand the different forms of deeds, which you can check out here.

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