Grantor vs. Grantee: What’s the Difference?

Both grantor and grantee can come with a variety of meanings, depending on the context. When it comes to the world of real estate transactions, the terms can apply to a few different situations. Within the real estate world, grantor and grantee are roles that are defined clearly. If you’re planning to buy sell, or rent a home anytime soon, you should be aware of the role you’ll be put into and what it means for you. 

What Is a Grantor?

The grantor is the person or entity that holds ownership of a property. The term is used in the case of a real estate transaction. The grantor can be a homeowner who is selling their home to a third party. Grantors can also be a landlord or a mortgage lender. 

What Is a Grantee?

The grantee is the person or party on the other end of a real estate transaction. They could be purchasing a home or property, in which they are taking over the ownership rights of that property from the grantor. Or, they could be the tenant who is agreeing with a landlord to pay regular fees for temporary possession of a property. In the case of mortgages, the grantee can also be the borrower who agrees to accept the loan terms and repay the loan in a timely manner. 

Grantors, Grantees and Real Estate Deeds

A few types of legal documents — called real estate deeds or property deeds — offer protection to the grantor and the grantee during a real estate translation. The type of deed used in a transaction will be determined based on a few factors. This includes the relationship between the grantor and the grantee. It can also vary based on whether the grantor or grantee is an individual or an entity or a trust. Here are some of the types of deeds that you should be familiar with.

General Warranty Deed

A general warranty deed is a document that guarantees that the grantor is not aware of undisclosed issues with the property title. It also holds the grantor responsible for paying related legal expenses if an issue with the title comes up later. 

Special Warranty Deed

The special warranty deed is another document that is designed to protect the grantee. With this deed, the guarantor guarantees that they have the right to transfer ownership of the home. They also guarantee that no creditors have filed a lien against their home during their ownership and that they’ve paid off their mortgage on the home. 

Grant Deed

The grant deed provides some amount of protection to both the grantor and the grantee. It is similar to the general warranty deed in that it relates to title issues that might arise with the property. 

With a grant deed, the guarantor promises that they not only have the right to sell the property but also that they have not already sold the home to someone else. The guarantor also promises in this document that there are no liens or claims against the property from their time as the owner of the property. 

This document protects the guarantor as well by waiving liability if title problems arise that are related to previous owners of the home. In some states, a grant deed might also be referred to as a limited warranty deed or a special warranty deed.

Quitclaim Deed

A quitclaim deed is similar to a warranty deed in that it transfers ownership of a property from the grantor to the grantee. However, it does not provide the same amount of protection to the grantee. The document does not guarantee that the grantor holds the title to the property or that there are no title issues with the property. 

Quitclaim deeds are not common, and it’s important that both the grantor and grantee are aware of and comfortable with this type of deed before using it. It’s typically only used in certain situations, such as if the grantor is transferring property to a family member or into a trust. 

Deed In Lieu Of Foreclosure

A deed in lieu of foreclosure is sometimes used by homeowners to avoid the foreclosure process. In these cases, the grantor hands over the ownership of their home to the mortgage lender. By doing this instead of going through the foreclosure process, both the lender and homeowner can avoid the costs and time spent on the process. It can also keep the foreclosure off of the homeowner’s credit report. 

Special Purpose Deed

A special purpose deed is a type of deed that is used when the grantor is not the one who is signing the deed. Instead, the deed is signed by someone else who is acting on the grantor’s behalf — usually a power of attorney or an estate executor. Since the grantor is not signing the deed themselves, the guarantor does not offer guarantees that there are no title issues with the property. 

Interspousal Deed

Interspousal deeds are often used when real estate is divided during divorce proceedings. It can be used to transfer property that was owned by one of the spouses to the other spouse. Additionally, it can be used to transfer the property from both spouses to only one spouse. 

Deed of Lease

A deed of lease is used when a property is being rented or leased to another party. This document lays out the terms and conditions of the lease agreement, including payment schedules, fees and tenant responsibilities. The deed of lease can protect both parties and ensure that there is a mutual understanding of the terms and conditions of a lease. 

How Do I Know Which Deed to Use?

Even with a clear understanding of whether you are the grantor or the grantee, it can still be difficult to figure out which deed is right for your transaction. If you’re working with a real estate attorney, they will likely coordinate all of the details for you. Depending on the state that you’re in, a real estate agent may be able to help you with this as well. All you need to do is be sure that you understand the responsibilities of your role concerning the deed that is being used in your transaction. As long as you’ve consulted with the appropriate parties and you’re comfortable with the liabilities and/or protections that come with it, you can rest assured that you’re using the right legal document for your situation. 

Frequently Asked Questions