Question for Real Estate Agents - Massachusetts (sale, insurance)

[TAM88]

I am trying to understand the process and use of the terms "title" and "deed" as they relate to the purchase of a house.

When you're in the process of buying a house, the lender you use to finance the purchase will hire a title insurance company to research and confirm certificate of title for the sale of the property. They will confirm that the seller has the right to sell the property and also confirm if anyone has a lien on the property. Title isn't a physical document like a deed is. A deed is a piece of paper that lists the property and transfers ownership of the house from one person to another. The deed is held by the bank until the mortgage is paid off.

Does that sound correct?

What gets filed with the county? Does the owner need to have copies of a deed even if they ave a mortgage?

[CaseyB]

Originally Posted by TAM88

I am trying to understand the process and use of the terms "title" and "deed" as they relate to the purchase of a house.

When you're in the process of buying a house, the lender you use to finance the purchase will hire a title insurance company to research and confirm certificate of title for the sale of the property. They will confirm that the seller has the right to sell the property and also confirm if anyone has a lien on the property. Title isn't a physical document like a deed is. A deed is a piece of paper that lists the property and transfers ownership of the house from one person to another. The deed is held by the bank until the mortgage is paid off.

Does that sound correct?

What gets filed with the county? Does the owner need to have copies of a deed even if they ave a mortgage?

After you close, your attorney will record the deed at the county courthouse.

[MikePRU]

Originally Posted by TAM88

I am trying to understand the process and use of the terms "title" and "deed" as they relate to the purchase of a house.

When you're in the process of buying a house, the lender you use to finance the purchase will hire a title insurance company to research and confirm certificate of title for the sale of the property. They will confirm that the seller has the right to sell the property and also confirm if anyone has a lien on the property. Title isn't a physical document like a deed is. A deed is a piece of paper that lists the property and transfers ownership of the house from one person to another. The deed is held by the bank until the mortgage is paid off.

Does that sound correct?

It's a little confusing because they're basically two different words that mean the same thing. If you were to sell me your car, you would sign over the title of the car to me. Your car's title is like the deed of the car. Typically in real estate when people talk about ownership they use the word "title" or they say that you "hold title." When they're referring to the document that actually gives you title then they say "deed."

Depending on the state, when you have a mortgage ownership of the property may legally fall to the lender or ownership may remain with the homeowner. I believe in MA (been a while since I learned this) ownership is with the lender although the deed never mentions the lender and the deed is never physically held by the lender like say a car's title is held by a lender when you have an auto loan.

Also to clarify . . . when you're buying a home the closing attorney will research the title history of the property to confirm that the seller is actually the legal owner of the property and also they'll look for outstanding liens, easements, etc. The title report the attorney writes up is then reviewed by the title insurance company and they issue a policy. Lenders require that the buyer pay for a lender's title policy but they make it optional to have an owner's policy. These policies aren't a ton of money and if you end up needing an owner's policy then it will be well worth what you spent. The annoying part of title insurance is that the title agent gets a huge commission. Sometimes as high as 60 or 70% of what you pay. I've heard of some people shopping around, but I'm not sure how much money that can save.

Originally Posted by TAM88

What gets filed with the county? Does the owner need to have copies of a deed even if they ave a mortgage?

After the closing, the closing attorney will record with the county Registry of Deeds a number of the documents you'll be signing that day like the deed and the mortgage and a couple other pieces of paper. If you elect to have your attorney put a homestead on your property (I always do and also suggest it to my clients), they'll record that as well. Some attorneys elect to record electronically while others still physically have the documents brought to the registry for recording.

As the owner, it's not a bad idea to keep a copy of the deed. Eventually, the Registry of Deeds will mail you the original copy of the deed. I like to keep it in a safe place just in case the Registry for some reason loses their copy.