Deed Vs Title
By Kurt Real Estate Nov 23, 2019
People often use the terms deed and title interchangeably. What you might not realize is that there is actually a very big distinction between the two. First, let’s define exactly what each means and then separate out the differences.
A deed is a legal document used to convey ownership of real property. Title is a legal way of saying you have ownership of real property. Thus, when you buy property you receive a deed that shows the title you have to that property.
To get a deed and “take title” to a property, you will first have a title company run a preliminary report on the current title of the property. This is important to ensure that the seller in fact has the legal right to sell the property. It’s also important to identify if there are any liens against the property. If everything is clear, then at the close of escrow title will be transferred to you on the deed.
In the state of California, the title company will take care of recording the deed at the county recorder’s office. Once the deed is recorded, you officially have title to the property and it is now yours!
There is a way to insure your title to the property and that is through title insurance. Even after all is said and done, in rare instances issues with title may pop up lated on down the line (for example, a missed lien). This can be very costly to remediate and is likely an expense you do not want to incur if it was not yours to begin with. To protect against any type of financial loss there are two types of title insurance: owner’s title insurance and lender’s title insurance.
Unlike other types of insurance where the policyholder is covered from events that may happen in the future, owner’s title insurance is meant to protect a buyer from events that may have happened in the past and could jeopardize their title to the property. This could be a number of things including, but not limited to: title defects, fraud, unpaid liens, etc. On the other hand, when you secure a mortgage, your lender will require that you purchase lender’s title insurance to protect the lender in case any title problems were to arise.
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