The Definition of Grantor in Real Estate
Not all grantors in deeds offer buyers the same protections
"Grantor" is a legal term that's used in real estate transactions. The grantor is the seller of a property such as a house. He conveys or gives his title to a grantee—the buyer.
A grantor transfers title to a grantee through a legal instrument known as a deed. In most real estate sales, the closing attorneys make sure that the deed documenting the transfer of a title is recorded, usually at the county courthouse in the jurisdiction where the property is located. This provides certifiable proof that a legal transfer occurred.
Deeds are not necessarily forever. They can be modified by the grantor or by the grantee to include covenants and other restrictions stating how a piece of property can be used, sold, or otherwise reclaimed.
Get the Language Right
It's vitally important that a deed clearly identify both the grantor and the grantee and include a full description of the property in question. Deeds with murky language run the risk of being questioned. They can expose buyers and sellers to lawsuits.
Always make sure you obtain a title insurance policy...just in case.
Grantor Roles in Various Deeds
The type of deed a grantor can convey varies among states. Each has its own rules and guidelines. What's recognized in Iowa might not be accepted in Illinois. Buyers and sellers should always sit down with their attorneys ahead of time to determine the type of deeds they will convey or receive and why.
Many title companies are reluctant to provide this kind of advice to homebuyers and sellers and for good cause. Deeds are legal documents. Title company employees such as title officers and escrow officers are generally not lawyers so they're prohibited from providing legal advice.
General Warranty Deeds
A grantor who conveys a general warranty deed confirms that the title is “good and marketable." This means that no liens exist on the title that might prevent her from selling the property and that she is the person who has the right to sell the property.
General warranty deeds protect grantees against claims to the title dating back to a property's origins. They offer buyers the greatest amount of protection in a real estate sale. Not every state uses general warranty deeds.
Special Warranty Deeds
The grantor of a special warranty deed bears no responsibility for any title defects that occurred before he owned the property. Grantees have limited protection when they receive property by special warranty deed. There's always the possibility that any issue predating the seller could come back to haunt them.
The grantor of a grant deed conveys his property with a guarantee that he has not concurrently sold the property to someone else. He also guarantees that there are no additional liens or encumbrances on the property other than those he has disclosed.
The grantor of a quitclaim deed makes no guarantee that she has a legal right to convey the property. She might not even legally own the property. She can convey the Statue of Liberty to you via a quitclaim deed but this doesn't mean you'll own it because she doesn't own it to transfer it to you.
Quitclaim deeds offer grantees the least amount of protection under the law. They're typically not used by parties who don't know each other well. This type of deed is most often used among family members in cases where there is uncertainty regarding heirs and in divorce cases where one spouse is relinquishing an ownership interest in the property to the other.
Other Documents Naming Grantors
Real estate deeds typically name the grantor and grantee, but other documents require the identity of these parties to be clear as well. They include real estate leases, vehicle sale and title documents, business partnership documents, financing contracts, and wills.
At the time of writing, Elizabeth Weintraub, CalBRE #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.