Grantor vs. Grantee: What's the Difference?
When you’re buying or selling a home, you’ll often come across terms like “grantor” and “grantee”. These aren’t just fancy legal terms; they identify who is transferring and who is receiving property rights.
In every real estate transaction—whether it’s a home purchase, a family gift, or a property transfer during refinancing—understanding who the grantor and grantee ensures a smoother process.
Let’s break down these terms and their roles in property transfers, so you’re prepared for any real estate deal.
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What is a Grantor?
The grantor is defined as the person or entity that owns the property and is transferring ownership rights.
Think of the grantor as the “giver” of the property title in any legal document where ownership changes hands.
If you’re selling your home, you’re the grantor in that transaction.
Role of a Grantor
The grantor’s main role is transferring ownership to the grantee through a property deed. Ownership transfers when the grantor signs a deed, officially handing over property rights to the grantee.
A grantor must provide an accurate and truthful deed. For example, if an easement exists—a right allowing someone else to use the property—this is required to be disclosed and shared.
They also have to make sure the title is clear of liens or claims, like unpaid taxes or debts. If any lien is present, the grantor needs to settle them before completing the transaction. It’s best for you to work with a real estate attorney or title insurance company to make sure all details are in order.
What Happens if the Grantor Dies?
In situations where the grantor passes away before completing the property transfer, the property can pass to heirs based on the will or state laws. It’s important for grantors to have a clear estate plan to avoid legal challenges.
Types of Grantors in Real Estate
Grantors can include:
Individuals
Selling a home or gifting property.
Corporations
Transferring business-owned real estate.
Trusts
Holding property for beneficiaries.
Each type has different rules and potential costs. For example, a family might purchase a home for personal use, while a business might acquire property for expansion.
What is a Grantee?
A grantee is defined as the person or entity receiving ownership of the property. For example, if you’re buying a house, you’re the grantee because you’re the one receiving the property rights from the grantor.
Role of a Grantee
Usually, it’s the grantee’s responsibility to record the deed with the county, which makes their ownership official. Recording the deed protects the grantee by showing clear grantor’s ownership history because public records establish the ownership rights of the homebuyer or borrower.
You can check out property deeds for free from county assessor or recorder websites, often under “property records.” Also, some states offer searchable online databases for public records.
The grantee then needs to record the deed to make their ownership public. If you need more guidance, working with a real estate attorney or qualified mortgage lender, like Rate, can help streamline the process.
Common Rights of a Grantee
The grantee receives all rights the grantor transfers. Grantees are also entitled to a clear title, which means the property shouldn’t have any undisclosed claims. If a hidden lien or issue comes up later, the grantee is generally protected by the title insurance.
Title insurance covers any unexpected claims that may come up after the transfer.
Can a Grantee Refuse Property Transfer?
Yes, a grantee has the right to refuse the property transfer if they believe the property has unresolved issues like liens or zoning restrictions. It’s important to do your due diligence before accepting ownership.
Types of Grantees in Real Estate
Grantees can include individuals, multiple family members, or businesses, each with unique ownership goals.
Grantors, Grantees, and Real Estate Deeds
The connection between grantor and grantee becomes official through real estate deeds.
Types of Deeds in Real Estate
Different types of deeds serve different purposes, each providing their own levels of protection to the grantee and affecting the grantor’s ownership differently. Here’s a quick look at the most common types:
General Warranty Deed
A general warranty deed is known for offering the most protection to the grantee. It guarantees that the title is clear of any unknown claims or encumbrances.
This deed provides the grantee a high level of confidence that they’re receiving full ownership of a property with no hidden surprises.
Special Warranty Deed
With a special warranty deed, the grantor assures the grantee that no title issues occurred during their period of ownership, but it doesn’t cover any claims before that.
This kind of deed is usually used in commercial transactions where specific title guarantees are necessary but less extensive than a general warranty deed.
Grant Deed
A grant deed certifies that the property hasn’t been transferred to anyone else before and that no undisclosed liens or encumbrances exist on the title.
Although it offers fewer protections than a warranty deed, it’s a popular choice in many real estate transactions.
Deed in Lieu of Foreclosure
In cases where a homeowner is unable to make mortgage payments, a deed in lieu of foreclosure allows the grantor (typically a distressed borrower) to transfer ownership to the lender.
This option helps avoid the lengthy foreclosure process and may limit negative impacts on the credit score of the homeowner.
Quitclaim Deed
A quitclaim deed transfers whatever interest the grantor holds in the property to the grantee without guaranteeing a clear title.
This deed is common between family members or for estate planning, where the transaction includes trustworthy parties.
Interspousal Deed
An interspousal deed is typically used between spouses, especially in cases of divorce or marriage changes. It transfers property rights from one spouse to another. This deed often helps clarify ownership of a property without requiring a formal sale.
Special Purpose Deed
A special purpose deed is used for specific legal purposes like property transfers involving power of attorney or specific estate planning needs.
Each situation might have its specific legal requirements, making this deed ideal for particular cases that don’t fit into other categories.
Real Estate Encumbrances and How They Impact Grantors and Grantees
An encumbrance is a restriction on a property that affects how it can be used or transferred. Think of it as a note that sticks with the property and can impact both the grantor and grantee in different ways.
Common encumbrances include easements and liens, and it’s important for both parties to know about them before a transfer deed is signed.
What is an Easement?
An easement grants someone other than the homeowner legal rights to use part of the property for a specific purpose.
For example, a utility company may have an easement to install power lines across a section of land. While easements don’t affect full ownership rights, they can limit how certain parts of the property are used by both the current and new owner.
What is a Lien
A lien is a legal claim placed on a property, often used as collateral to ensure the repayment of a debt. When a lien is present, it means the grantor cannot fully transfer clear ownership rights to the grantee until the debt is settled.
For example, if there’s an unpaid mortgage or tax debt associated with the property, a lien may be filed, and the grantor must fulfill this debt before completing the property transfer.
Liens can impact the grantee also because they may become responsible for addressing the lien if it remains undisclosed or unresolved after the transfer.
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Whether you’re a grantor selling your home or a grantee stepping into ownership, understanding the ins and outs of property transfers can make all the difference.
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