The Definition of Grantor in Real Estate
Not all grantors in deeds offer buyers the same protections
Grantor is a legal term that is used in real estate transactions. The grantor is the seller of a property, and they transfer a 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. It provides certifiable proof that a legal transfer occurred.
It is vitally important that a deed identifies both the grantor and grantee, and includes a full description of the property in question. Deeds with murky language run the risk of being questioned and exposing buyers and sellers to lawsuits. Luckily, deeds are not 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. 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 is recognized in Iowa might not be accepted in California. 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 reasoning. 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 them from selling the property and that they are the person who has the right to sell it. 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, but 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 they owned the property. Grantees have limited protection when they receive property by a special warranty deed, and there's always the possibility that any issue predating the seller could come back to haunt them.
The grantor of a grant deed conveys their property with a guarantee that they have not concurrently sold the property to someone else. They also guarantee that there are no additional liens or encumbrances on the property other than those they have disclosed. A grant deed contains the names of the grantor and grantee, and a description of the property being transferred, such as the tract number, lot number, and address.
The grantor of a quitclaim deed makes no guarantee that they have a legal right to convey the property. They might not even legally own the property. They can convey the Statue of Liberty to you via a quitclaim deed, but this doesn't mean you'll own it because they don't own it or have the right 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. Landlords and renters have a grantor-grantee relation, and the seller and buyer of a motor vehicle have a grantor-grantee relationship. When dealing with wills and financing contracts, you'll encounter grantors and grantees, and certain business arrangements and partnerships may require the establishment of a grantor-grantee relationship, though it's not as common.