Do You Actually Know What Title Means?

If you read the purchase contract from your local Board of Realtors you’ll notice that the term “title” comes up quite a bit. As a newbie, I only had a vague idea of what that word meant. I knew it had to do with ownership of a property but what does that mean in the real world? Ownership is an abstract concept so it’s easy to get confused when trying to define it.

Because I was tired of not being clear on what title really meant I decided to write this blog to teach myself and all the other newbies out there what this key concept is in real estate!

Let’s dive into it.

At its core, title is a very simple concept: it determines ownership of real estate.

Still sound abstract? Well, it is! There actually isn’t a physical aspect to it. You can’t hold a “title” in your hands, you can’t touch it. It’s a legal concept not a physical document.

This brings us to our first key take-away:

Title is a legal concept not a physical document.

So then, when you buy your next investment property, how does this abstract concept of title go from the seller to you?

This is where we can introduce the concept of a deed.

A property deed is the actual physical legal document that transfers ownership from the seller, to you, the buyer. So the deed is a piece of paper that says that the seller is giving you title to the property.

Key take-away #2:

A deed is a physical document that legally transfers title from the seller to the buyer.

Here’s a picture of an actual deed I found on Google so you can see for yourself:

So there you have it. Now you know plain and simple what title is and how it is legally and physically transferred. I find it helpful to know what these fundamental concepts mean. Once you break them down they aren’t actually that difficult to understand! And they serve as an important foundation for your real estate knowledge.

In my next blog, I’ll talk about what you need to look out for when you take title of your next investment property. Knowing what title is is one thing, but avoiding pitfalls in the title transfer process is another. Stay tuned!