Grantor Vs. Grantee in Real Estate: Everything You Need to Know

Whenever assets are being transferred from one individual to another, the transaction typically involves a grantor and a grantee.

The two terms are used in legal documents in different industries to name the recipient of the assets and the person transferring ownership rights of those assets to someone else.

These transactions can cover everything from stocks to real estate.

What Is a Grantor? 

After finding the right property and securing the financing, many first-time homebuyers are only thinking about moving in. But an important part of the process that’s often overlooked is the actual closing of the purchase.

The grantor is the party in the transaction that is selling the asset. In the case of a property transaction, this refers to the current property owner, who is transferring the rights of the property to the grantee.

When the property is being sold, this party can also be referred to as the deed of trust grantor. But when it comes to mortgages, the grantor is the borrower.   

What Is a Grantor?

The grantor on a mortgage loan is the person who signs the mortgage documents. In this case, the grantor meaning refers to the mortgagor or the borrower.  

Grantor is also synonyms with the term trustor. This is used to describe a person who wants to transfer their asset into a Trust, conferring benefits to the trustee. The “or” suffix means that this party is “giving,” while the “ee” suffix means that the other party is “receiving.” 

What Is a Grantee?

This is the person receiving the asset. In the case of a property transaction, the term refers to the party purchasing real estate.

On a deed, the grantee is the buyer/new owner/recipient whose name appears at the top.

In the case of a loan, the grantee can also be described as a lienholder. The mortgage lender is the grantee in this case – sometimes called the mortgagee. 

Deeds That Require a Grantor and Grantee

Let’s dive into the different types of property deeds that name these two parties. 

Warranty Deed

A warranty deed gives the grantee a warranty from the seller that allows them to defend the property title forever. Such a document proves that the grantor has the right to sell the property and that there are no liens against the title that could prevent the transaction from proceeding legally. Thus, this deed type primarily protects the grantee. 

Grant Deed

Grant deeds are limited warranty deeds available in some states. They also legitimate the conveyance of property from the grantor to the grantee, offering some protection, but not as much as a warranty deed. 

When using a grant deed, there are two warranties. The first guarantees that there are no issues with the title, such as claims or liens, during the owner’s time in residence. The second is that the grantor has the right to sell the property and hasn’t already sold it to somebody else. 

The deed, however, does not protect the grantee from the possibility that another party made a claim against the home before the grantor’s current occupancy. Therefore, it is not as comprehensive as a warranty deed, which does offer this level of protection. 

Quit Claim Deed

A quit claim deed offers the least amount of legal protection with no assurances about the grantor’s legal right to transfer the asset. Buyers who do not know each other rarely use this type of deed. Quit claim deeds are mostly used when real estate is being transferred between family members. 

That’s because the grantee has no protection if it emerges that the grantor did not legally own the property or there are title problems. So, if you’re planning on using this kind of deed, make sure you understand the risks. 

Grantor and a grantee can be the same person only in a quit claim deed where the sole owner of a property transfers half the interest to his new spouse, for example, and lists himself as both the grantor and grantee. 

Special Warranty Deeds

Mortgage arrangements can affect the conveyance of a property. It could affect the grantee if the grantor has:

• Unpaid mortgage bills
• No right to transfer ownership of the property
• Creditor filing lien against the home

Under these conditions, the purchase of the home could be invalid, or the grantee could be taking on additional liabilities following the purchase. 

Special warranty deeds offer additional protection for grantees, especially during lien disputes. It guarantees that the seller is not responsible for claims made against the property prior to ownership. 

Deeds in Lieu of Foreclosure

A deed in lieu of foreclosure means that the homeowner temporarily hands over ownership of their property to the lender to avoid being foreclosed (and having to move out). 

Deeds like this typically damage your credit score. However, they can be beneficial to both you (the grantor conferring deed rights) and the grantee (the lender who gave you the money to purchase the home). 

They benefit you in the sense that they keep your foreclosure private – something you might not be proud to talk about in public. And they help the lender avoid the costs associated with foreclosure.

Interspousal Transfer Deed

Lastly, interspousal transfer deeds involve the transfer of property ownership between married couples. These deeds can be used in divorce cases, with one party receiving a sum of cash that’s equivalent to their share of the home’s equity value. 

As you might guess, the grantor is the spouse giving up their ownership rights to the property, and the grantee is the spouse receiving ownership rights. Unless the grantor has spare cash, they typically refinance their home to pay for the equity withdrawn by the other partner. 

Title Searches

Title searches involve the examination of public records and retrieving documents on the history of a piece of property. It’s intended to determine a property’s legal ownership and if there are any claims on the property in question. 

These records are kept in books at government offices. Each property name is accompanied by the following information: 

• A legal description of the property
• The property address
• Any improvements being conveyed
• Dates of transfer of ownership

When transferring titles, officials use the book page of the deed in title documents and then update the grantee book as necessary. 

The grantee book is helpful for finding out whether there are any liens or claims against the property. It shows both the current grantor, dates of previous transfers, and information regarding whether they were concluded appropriately. 

Many buyers ask lawyers to check the grantee book for any potential hazards before proceeding with the purchase of a property. They work backward through the grantee book, looking for any evidence of outstanding title claims.