Grantor Vs. Grantee: What’s The Difference?

There is a lot of dreaming that goes into the process of buying a home. From the atmosphere of the neighborhood to the smallest detail on the stairway, we imagine what our perfect house will look like.

But there is more to purchasing a home than finding the “right one.” The transfer of ownership rights requires knowledge of the legal language used in real estate. That sounds intimidating, but learning the basics is important for every future homeowner.

Breaking the vocab down will put you on the path to your very own home. With that in mind, let’s look at the differences between a grantor vs. grantee.

There are two sides to a transaction. In real estate, a grantee is the recipient of the property, and the grantor is a person that transfers ownership rights of a property to another person. However, the specifics of their transaction may vary depending on the situation. The official documents they use, such as a deed, detail their obligations.

What Is A Grantor?

The grantor is the party in a transaction who conveys ownership of an asset. During a real estate transaction, the grantor sells the property rights to the grantee.  

What Is A Grantee?

To put it simply, a grantee is the person in a transaction who receives something – aka the buyer. In terms of a real estate transaction, the grantee receives ownership of the property after the closing process ends.

Grantors and grantees have unique relationships depending on the circumstances of their transaction. They use different types of deeds and documents to outline their expectations and bind them. Here are a few you should know.

General Warranty Deed

A warranty deed is a type of legal document used in the transfer of real estate from grantor (seller) to the grantee (buyer). It comes with certain guarantees that offer extra protection to the grantee, in particular.

When a seller signs a general warranty deed, they effectively swear that there are no undisclosed title issues with the property. This promise even covers the time before the grantor’s ownership.

If a problem with the title does arise, the grantor must pay the associated legal costs.

Grant Deed

A grant deed, also called a limited warranty deed or special warranty deed in some states, facilitates the transfer of property from a grantor and grantee. It provides some protection to both parties, but not as much as a general warranty deed.

In the case of the grant deed, there are two warranties. One, that the grantor has the right to sell the property and did not sell the property to anyone prior. And two, there are no title problems, like liens or claims, against the house from their time as the owner. However, it does not protect the grantee from any claims made against the property before the grantor’s time.

So, in the end, it protects the seller from liability in the case of previous title problems and the buyer from current ones.

Quitclaim Deed

Like warranty deeds, quitclaim deeds transfer ownership from the grantor to the grantee. But it does not actually guarantee the grantor’s interest in the property. So, there is no protection in place for the grantee if they learn the grantor did not hold the property title or if they sold the real estate with property title problems.

Usually, quitclaim deeds only pop up in certain situations. For example, you may use one to transfer property between family members. Or, you may use them to transfer a title into or out of a trust. Due to the lack of protection, though, both the grantor and grantee should both confirm that they are comfortable with the parameters of a quitclaim deed before moving forward.

Special Warranty Deed

This type of deed offers an extra level of protection to the grantee, compared to some others. The grantor makes a guarantee to the buyer using a special warranty deed that the home was free and clear of legal encumbrances during their ownership. Meaning, the grantor paid their mortgage off, has the right to transfer ownership, and no creditors filed a lien against the home.

However, it only applies to the grantor’s ownership. The seller is not responsible for any claims made against the property before they owned it.

Deed In Lieu Of Foreclosure

A deed in lieu of foreclosure is a fallback method for homeowners to help them avoid foreclosure. In it, they voluntarily hand over ownership of their home to their mortgage lender.

In effect, a deed in lieu of foreclosure can help you avoid a foreclosure showing up on your credit report and release you from the responsibility of your mortgage. It can potentially benefit both parties, though. With the transfer, both the lender and borrower avoid the costs and consequences of the lengthy foreclosure process.

The specifics of each real estate transaction vary, and the range of deeds out there proves that. But one thing is consistent: the grantor transfers ownership of the property to the recipient, the grantee.

You may find yourself either selling or buying a home someday soon. To prepare, you may want to continue polishing your real estate know-how. Consider checking out the Rocket Mortgage® Learning Center for more resources and information.