When it comes to buying or selling a property, there are a lot of legal documents and paperwork involved. Two of the most important documents in the process are the purchase agreement and the title. While they may seem similar, they serve different purposes and are not interchangeable.
A purchase agreement, also known as a sales contract or purchase contract, is a legal document that outlines the terms and conditions of a property sale. It includes details such as the purchase price, financing terms, closing date, and any contingencies or conditions that must be met before the sale can be completed.
A title, on the other hand, is a legal document that proves ownership of a property. It includes information such as the property’s legal description, any liens or encumbrances on the property, and the names of the current and previous owners.
While a purchase agreement is a necessary document to initiate a property sale, a title is required to transfer ownership of the property. In fact, a title search is typically done before closing to ensure that the title is clear and transferable.
It’s important to note that a title can only be transferred if there is clear and marketable title. This means that the property has no liens, encumbrances, or legal disputes that could affect ownership or use. A title company or attorney will typically conduct a title search to ensure clear title before a sale is completed.
In summary, a purchase agreement and a title are both important legal documents in a property sale, but they serve different purposes. A purchase agreement outlines the terms and conditions of the sale, while a title is a legal document that proves ownership and allows for the transfer of the property. If you’re buying or selling a property, it’s important to work with a qualified and experienced real estate attorney or title company to ensure that all necessary documents are in place and the sale goes smoothly.