It is essential to be informed about all terms and conditions that may apply when buying a property. Legal terms like “grantor” and “grantee”, respectively, refer to both buyers and sellers respectively; similarly, rental agreements cover both landlords and tenants alike. A deed – an official document outlining the relationship between grantors and grantees as well as their rights and responsibilities – serves as the binding legal contract that outlines this arrangement.
What is a Grantor?
In real estate transactions, the grantor is the party responsible for transferring ownership of property from one party (the grantee) to another. This could be an individual selling their home or landlord renting their space to someone else; any entity capable of renting or selling their goods could serve as the grantor.
What is a Grantee?
A grantee is the other side of a real estate transaction. They can either be the buyer or tenant and may rent or sell their home in order to acquire the property.
Grantors, Grantees and Real Estate Deeds
When property is transferred between parties, the grantor grants their legal right to use, own and/or sell it. This right is known as “title,” which is granted through a document known as a property deed. Depending on where the grantor resides, there may be various types of deeds which specify the terms and conditions of this transfer.
General Warranty Deed
A warranty document transfers property ownership from the grantor to the grantee and offers maximum protection to that individual. It certifies that there are no outstanding legal issues concerning either title or possession of said property, and must cover legal expenses if any issues such as easements or tax liens come to light during and after grantor possession of it. This protection extends both before and after grantor takes possession.
Many homebuyers mistakenly confuse warranty deeds and home warranties. Although both provide protection, the two differ. A home warranty covers repairs or replacements for systems and appliances that break down after the sale of a house, usually for up to one year.
Special Warranty Deed
A special warranty deed transfers property ownership from the grantor to the grantee. The grantor guarantees there are no encumbrances on title liens while they were the owners of the property, and will not be held accountable for any issues that might have arisen from previous owners. This type of deed is frequently used by temporary owners such as banks who foreclose on a property then put it up for auction.
Grant Deed
A grant deed conveys property ownership to the grantee. This guarantees that no other parties have acquired title to the land and there have been no title issues during their ownership of it. Furthermore, any legal costs incurred in defending that title will not be passed along to the grantee.
Quitclaim Deed
A quitclaim deed is a trust-based instrument used to transfer property ownership from one owner to another. Unfortunately, this doesn’t guarantee that the grantor will retain title; if there are later claims against it, this type of deed does not provide protection for the grantee. These trust-based documents should only be utilized in specific instances such as family inheritance transfers between relatives.
Special Purpose Deed
A special purpose deed can be used to transfer property ownership for another entity, such as an executor managing an estate. The grantor acts in an official capacity and is immune from any claims that may be made against the title.
Deed in lieu of Foreclosure
A deed instead of foreclosure allows homeowners to transfer property ownership back to their lender. This step is often taken by those unable to make mortgage payments and wish to avoid the lengthy foreclosure process. The grantor may not be held personally responsible for the deficiency amount – that is, any remaining mortgage balance – but in order to waive it, the lender must agree in writing.
Interspousal Deed
This deed transfers property ownership to one spouse from the other. When both spouses share ownership of property, this type of deed may be used. If there is an outstanding mortgage on the property, then typically, the spouse receiving it will either sell it or refinance the loan in their name to keep it.
Lease Deed
A deed or lease grants permission to the grantor for temporary use of their property to one or more grantees. Usually, this arrangement involves a landlord and one or more tenants sharing property. The lease deed outlines all relevant terms and conditions so all parties are aware of their rights and responsibilities.
Grantors vs Grantees
Real-estate transactions involve two parties: grantors and grantees. Grantors transfer ownership to grantees, while grantees temporarily use their property.
In the case of a home sale, a title search will be necessary. This process confirms who the legal owner of the property is and if there are any claims or liens against it. To make the transfer official, both grantor (or grantee) and grantee must sign the deed.
Deeds come in a range of protection levels, each offering different levels for parties. Even though deeds provide greater assurance, buyers may wish to consider purchasing title insurance to cover any unidentified property issues or encumbrances that might arise.
