Grantor Vs. Grantee: What’s The Difference?

This content has been reviewed and edited by an Investment Advisor Representative working for Global Predictions, an SEC-registered Investment Advisor.

In real estate, the terms grantor and grantee are used to describe the people involved in transferring property. Understanding these roles can help make the process smoother and easier to follow. This guide will explain the roles, the differences between them, and the various types of deeds and their legal and financial effects.

Who is the Grantor?

The grantor is the person or entity that is giving the property away—whether by selling it, gifting it, or transferring it another way.

• Example: John owns a piece of land and decides to sell it to Sarah. In this case, John is the grantor because he is transferring the ownership of the land to Sarah.

Grantor’s Responsibilities:

• Provide a Clear Title: The grantor needs to make sure the property title is free of any disputes, unpaid debts, or legal issues that might complicate the transfer.
• Sign the Deed: The grantor must sign the legal document (the deed) that officially transfers the property to the grantee.

Who is the Grantee?

The grantee is the person or entity receiving the property.

• Example: Sarah, who is buying land from John, is the grantee because she is the one receiving ownership of the property.

Key Responsibilities of the Grantee:

• Ensure a Valid Transfer: The grantee should check that the grantor has the legal right to transfer the property.
• Record the Deed: After receiving the property, the grantee must record the deed with the local government office to officially show that the ownership has changed.

Types of Deeds and Why They Matter

Grant Deed:

A Grant Deed implies that the property hasn’t been sold to someone else and that there aren’t any undisclosed problems with the title. However, this guarantee only covers the time when the grantor owned the property.

When is it Used?

Grant deeds are often used for simple transfers, like between family members or trusted acquaintances, where both parties know the property’s history.

Warranty Deed:

A Warranty Deed gives stronger protection. There are two types:

1. General Warranty Deed: This covers the entire history of the property, guaranteeing the grantee against any past title issues.
2. Special Warranty Deed: This only covers issues that happened while the grantor owned the property.

When is it Used?

Warranty deeds are usually preferred in bigger, more complicated transactions, like buying commercial properties, where the buyer wants stronger protection against any past problems.

Quitclaim Deed:

A Quitclaim Deed offers the least protection. The grantor doesn’t guarantee that the title is valid; they just transfer whatever ownership they have. If they don’t legally own the property, the grantee might end up with nothing.

When is it Used?

Quitclaim deeds are often used when transferring property between family members or into trusts, where both parties trust each other.

If you want to learn more about the different types of deeds and their protections, check out our detailed guide on warranty deeds and other deed types.

Legal and Financial Considerations

Title Issues

If the grantor doesn’t provide a clear title, the grantee could inherit legal problems like unpaid debts or third-party claims. These issues can lead to costly disputes or court battles that complicate ownership. Ensuring the grantor provides a clean title is a crucial step in protecting the grantee from future complications.

Recording the Deed

Recording the deed is a key step to make sure the grantee becomes the legal owner. Here’s what you need to know:

• Timing: In some states, it can take a few days to several weeks to record a deed. It’s important to do this quickly to avoid ownership disputes.
• Costs: The cost to record a deed is typically between $50 and $150, depending on your location.
• Common Mistakes: Not recording the deed or submitting incomplete paperwork can cause legal issues, so it’s essential to double-check everything before submitting.

Title Insurance

Title insurance protects the grantee from hidden problems with the property’s title, such as unpaid debts or errors in the paperwork. This insurance is usually purchased during the property transaction process and can save the grantee from costly legal disputes down the road.

• How it Works: The insurance company will investigate the property’s title history for any potential issues. If a problem arises after the sale, the insurance covers the cost of resolving it.

Legal Considerations

Consulting a lawyer can be crucial in specific situations, such as:

• Inheritance or Gift Transfers: These transfers can be legally complex, especially with multiple beneficiaries.
• Potential Liens or Title Issues: If there are concerns about the property's past, a lawyer can help sort out potential legal problems before the transfer is complete.