While most of us are familiar with a car or boat title, people tend to confuse the difference between a title and a deed when selling a property. Both are part of most real estate transactions. When it comes to real estate, two essential documents are used to establish ownership: a deed and a title. Though these terms are often incorrectly used interchangeably, there are some key differences between the two. Allow the experts at our New Jersey title agency to help you in your understanding those differences will help you navigate your real estate transaction.
What is a title, and what is a deed?
The title is evidence of who owns the property. The title is usually held by a title company or by the lender. The title company or lender will provide the buyer with a title insurance policy. The policy insures the buyer against any claims made against the property.
Deeds transfer titles. A deed is a legal document that transfers property ownership from one person to another. The deed must be signed by the person selling the property and witnessed by a third party. The deed, in most states, must then be recorded with the local land registry office (this office can also be known as the recorder, clerk, assessor, or register, depending on the state and local county).
A deed must be signed and notarized, but a title does not. For a deed to be valid in most states, it must be recorded with the local land registry office. A title does not need to be registered but can be if the owner wishes and is allowed to file it with the deed. Again, this will vary by state.
When will you receive your deed and title?
If the title search company in New Jersey completes its research and everything else regarding the transaction is clear, you will receive your documents when you close on your home or property. During the closing process, when ownership formally changes hands, you will receive the deed and title along with all the other associated documents needed to officially change the property’s ownership to the buyer.
Bringing it all together
So, the key difference between a deed and a title when you’re buying a house is that the title is what conveys ownership of the property. The deed is the document that transfers ownership from the seller to the buyer, but the title is what proves that you own the property.
Purchasing a home or property is a big decision for most of us. It is essential to have a clear title to your property so that there are no questions about ownership in the future. That is precisely what we do here at Cortes & Hay. We ensure your title is free and clear. We also provide insurance to protect you in the event there is an error or question of ownership.
If you’re looking for ways to make your real estate closing go smoothly, our 50+ years of successfully serving you in cities across the state of New Jersey means we have the experience you need for a successful closing on your new property. Get in touch with us if you have any questions or would like to get the paperwork started on your upcoming real estate transaction.