Understanding the Difference Between a Tax Deed and Title

Photo by Tierra Mallorca on Unsplash

Are you thinking about buying a property? Perhaps you’ve heard the terms “tax deed” and “title” thrown around, but what exactly do they mean? Are they the same thing? Let’s unravel this mystery and understand why a tax deed is not the same as a title.

Imagine you’re buying a new car. You wouldn’t just hand over your hard-earned cash without receiving the car’s title, right? Well, the same principle applies to real estate transactions.

Firstly, let’s define what each term means:

Tax Deed:

A tax deed is a legal document that gives the government the authority to sell a property to recover unpaid property taxes. In simpler terms, if a property owner fails to pay their property taxes for a certain period, the government may auction off the property to recoup those unpaid taxes. When you purchase a property through a tax deed auction, you’re essentially buying the right to claim ownership of the property, subject to any outstanding liens or encumbrances.

Title:

A title, on the other hand, is a legal document that serves as proof of ownership of a property. When you buy a property, you receive a title that shows you are the rightful owner. It’s like the deed to…