When buying or selling a home, the focus is often on the price, the inspection, or the move itself, but behind the science, there is a critical step that makes the entire transaction official: transferring the deed and title. These legal documents don’t just confirm ownership, they protect your investment. Understanding the difference between the two can help you feel more confident and informed in your real estate journey.
Deed vs. Title
Deeds and titles both relate to ownership, but they serve different roles in the real estate process.
Deed
A deed is the physical document that transfers ownership of a property from the seller (grantor) to the buyer (grantee). It describes the property and is signed by the seller at closing, then recorded with the county. This recording ensures taxes and ownership records are properly maintained.
Title
The title reflects the legal history of the property and confirms that the seller has the right to transfer ownership without unresolved claims or issues. During the contract process, the title company performs a title search and issues a title commitment - a report that outlines any potential issues such as liens, unpaid utilities, and ownership conflicts. Title insurance protects both the buyer and lender against future claims or unknown problems. It’s important to note that there are exceptions to the title policy like easements, HOA documents, and mineral rights which may not be covered because they are disclosed within the title commitment so the buyer has been made aware. This is sometimes confused with home insurance, but they serve very different purposes.
Most real estate transactions involve both a deed and a title policy, especially when a mortgage lender is involved. Even if the actual land is not being transferred - for example in a condo purchase - a title search is still conducted because they are considered real property, Mobile homes are a bit different. If the mobile home is permanently affixed to the property and the land is transferring with it, a deed and title commitment are needed. If the mobile home is in a rented park space, it’s treated more like a vehicle sale.
Different Types of Deeds
The State of Colorado primarily uses four types of deeds in real estate, which fall into two categories: those with some form of assurance about the property’s title, and those that do not.
General & Special Warranty Deeds
A Special Warranty Deed is the default in Colorado. It ensures that the seller held clear title during their period of ownership but doesn’t make guarantees about what happened before they owned the property. This is where the title insurance policy becomes essential.
General Warranty Deeds guarantees that the property has a clear title free from defects, going back through the entire chain of ownership.
Bargain & Sale and Quitclaim Deeds
A Bargain & Sale Deed transfers ownership without providing any assurances about the property’s title history. These are often used to transfer water rights as well.
A Quitclaim Deed also offers no guarantees, it simply transfers whatever interest the seller has. Quitclaim deeds are usually used for low-risk transfers, such as between family members, into a trust, or to correct a name on a deed.
The type of deed is selected in the Contract to Buy and Sell to ensure both parties agree to how ownership will be transferred.
How to Hold Title on a Property
How you “take title” affects ownership rights, estate planning, and how property is transferred if an owner passes away. Each situation varies and this decision should be made with your attorney. This is also written in the Contract to Buy and Sell, as that’s how it will be recorded on the deed. The four most common ways to hold title are sole tenancy, tenants in common, joint tenancy, and through a trust.
Sole Tenancy
Sole tenancy is when there is a single name on the deed and the owner holds 100% of the property.
Tenants in Common
Tenants in Common allows for multiple names to be on the deed, signifying two or more owners. Each owner has their fractional share of the property with full rights; however, there is no right to survivorship. This means that if/when one owner dies, their share goes to their appointed heir, not the other owners. Although each owner is in charge of their share, all owners must sign off on selling the property. This is most commonly used among investment partners and heirs because it keeps legal matters divided while allowing shared ownership.
Joint Tenancy
Similar to Tenants in Common, Joint Tenancy allows for multiple co-owners of a property. The difference is the “right of survivorship”; if one owner dies, their share automatically transfers to remaining owners. Joint Tenancy is most commonly used with married couples.
Trust
Properties can be held in a trust, which are created to have a clear plan for the real estate upon the passing of an owner. It simplifies the transfer and avoids probate. Trusts can offer legal or tax advantages. These decisions are best made with your attorney, who will need to create the trust before purchasing or transferring real estate into it.
Understanding deeds, titles, and how property is held helps protect your investment and plan for the future. These aren’t just legal documents, they’re the foundation of secure homeownership. Working with a knowledgeable RealtorⓇ ensures you don’t miss important steps along the way. If you’re thinking about buying or selling in Southwest Colorado, The Durango Team at The Wells Group is here to guide you every step of the way.
