"Grantor" is a legal term used in real estate transactions to name the seller of a property. The grantor transfers title to a grantee through a legal tool known as a deed.
Closing attorneys usually ensure that deeds documenting the transfer of a title are recorded at the county courthouse in the county where the property is located. This serves as proof that the transfer was legal.
What Is a Grantor?
Grantors are named in both deeds and mortgage documents. The grantor on a mortgage is the borrower. A grantor is a person who transfers real estate to another person or entity or who encumbers it by taking out a loan, creating a lien against the property.
A grantor can convey many types of deeds. The types that can be conveyed depend on the state where the grantor lives. Each type of deed has its own rules and guidelines; what's recognized in Iowa might not be accepted in California.
Many title companies don't like to give advice about deeds to home buyers and sellers. They do this for a good reason; deeds are legal documents. Title company employees, such as title officers and escrow officers, generally aren't lawyers. This means they're prohibited from providing legal advice.
Types of Deeds
Deeds can convey and confirm many issues. Four types of deeds are most common.
Buyers and sellers should always sit down with their lawyers ahead of time to discuss the type of deeds they will use to convey or receive property and why.
General Warranty Deed
A grantor who conveys a "general warranty deed" confirms that the title is good and able to be sold. They claim that no liens exist on the title that might prevent them from selling the home, and they have the legal right to sell it.
General warranty deeds protect grantees (the person buying the home) against claims to the title dating back to a home's origins. They offer buyers the most protection in a real estate sale, but not every state allows them.
Special Warranty Deed
A "special warranty deed" grantor takes no blame for any claims placed on the title for periods before which they owned the property. However, grantees are not as protected when they buy a home with a special warranty deed. There's always the chance that an issue the seller wasn't aware of could come back to haunt them.
The grantor of a "grant deed" transfers a home with a guarantee that they have not sold the house to someone else at the same time. They also guarantee no other liens or encumbrances on it other than those they have already told the grantee about (meaning it's unencumbered). A grant deed contains the names of the grantor and grantee. It also describes what's being transferred (e.g., the tract number, lot number, address).
A "quitclaim deed" grantor makes no guarantee that they have any legal right to convey the property. They might not even legally own it. For example, you could buy the Statue of Liberty and "take ownership" via a quitclaim deed. However, this doesn't mean you'll own it because the seller neither owned nor had the right to transfer it to you.
Quitclaim deeds are not used by grantors and grantees who don't know each other very well. Instead, this type of deed is most often used among family members to pass estates to heirs; or in divorce cases where one spouse gives up ownership in an asset to the other.
Other Documents Naming Grantors
Real estate deeds typically name a grantor and grantee, but other documents require the identity of these parties as well.
Landlords and renters have a grantor and grantee relationship; sellers and buyers of motor vehicles have one as well. You'll see grantors and grantees when dealing with wills and financing contracts. Certain business arrangements and partnerships can require a grantor and grantee relationship, but this isn't as common.
Requirements for Deeds
A deed must identify both the grantor and grantee and include a full description of the asset in question. Deeds with murky language can confuse and pave the way for one or both parties to file a lawsuit.
Luckily, deeds are not set in stone for all time. The grantor or the grantee can modify them to include covenants and other rules stating how an asset can be used, sold, or reclaimed. You should always make sure to obtain a title insurance policy when you're buying a home, just in case.
- A grantor is a person who is granting, conveying, or selling an asset to another person.
- A grantor can also be a person who has encumbered a deed by taking a mortgage lien against the home.
- All property deeds should include the grantor's and grantee's identities, as well as a full legal description of the property.
- Deeds can usually be modified by either the grantor or the grantee.