Every industry has its own special terms. One of these is the real estate market. Both commercial and residential properties have their respective terminology. However, one that’s common to both is Title. Here’s a brief explanation of what it means in real estate.
A title lists the legal owner(s) of a property. It can be issued to describe possession of either real or personal real estate.
Not a Deed
The terms Title and Deed aren’t interchangeable. In real estate, a deed is an item that details the transfer of the property title from one party to another. Once received, the new owner can change the property as they see fit. Additionally, they can create their own deed to transfer a portion of ownership to another.
There are several different title types. Some of these are:
- Joint Tenancy — Two or more parties jointly hold the title.
- Tenants by Entirety (TBE) — Used when the owners are legally married. Here, the couple is considered one person.
- Sole Ownership — Property owned by one individual who is either single or married.
Who Can Be On A Title?
Those who have taken possession of a property are named on the title. These are the primary individuals responsible for mortgage payments. However, other individuals can be added to the title but not be co-signers.
For instance, in a marriage, one spouse might be named as the sole owner while the other is simply named within the document. In situations like a divorce or death, the title can be transferred to them or another party to avoid ownership interruptions.
Besides sealing a real estate transaction, a title is also important to determine potential issues. Before closing, a title search is performed to see if there is a lien on the property or if there are undisclosed owners.
Title Ownership and Mortgage
Unlike the auto financing industry, those who own real estate also receive a copy of the title at the time the property is transferred. When the mortgage is paid off or when it’s sold a new copy of the title is created for the necessary parties.