May 5, 2021

Discover what GRANTOR and GRANTEE mean in Real Estate

Grantor and grantee are two sides of the same coin. They coexist, and one even could say that they create each other. That’s why we’re adding both terms at once to Real Estate IQ’s glossary. Keep reading to find out their differences, types and discover how they are recorded.

To start with, they’re both legal terms that appear when something is about to change hands. The grantor is the person or entity that gives away property or rights to another person or entity. And the receiving side is known as a grantee–or a beneficiary, especially in trusts, wills, and life insurance policies. Keep in mind that lawyers are qualified professionals to ask for advice regarding legal issues.

If we interpret the words from a real estate point of view, the grantor is the seller of a property, and the grantee is the person who buys it. In this case, the homeowner transfers title through a deed (the legal record where the transaction is documented). This dynamic can also be seen in a landlord and renter’s relationship. Nonetheless, when it comes to mortgages, the grantor is the borrower.

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What is the grantor-grantee index?

Since the deed is a legal record, it has to be stored and available for consultation. The index is a set of documents where you can find information about real estate’s current and past ownership. It consists of two lists–one for the grantors and the other for the grantees–typically stored in the County Recorder’s office. Thanks to these records, everyone can follow property ownership in time. In addition, the index includes the property’s legal description, location, and type of document used to transfer ownership.

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5 common types of documents where you can find grantors and grantees

You can come across these terms in several places. However, the benefits and obligations differ from one another. Five of the most common ones are:

  • Warranty deed: here, the grantor endorses that the title doesn’t have liens or anything that might prevent him or her from selling and that he or she has the legal right to do so. Therefore, grantees are protected against claims to the title before the purchase.
  • Grant deed: in this scenario, the grantor states that the property hasn’t been sold to someone else and ensures other obstacles or liens than those already disclosed are nonexistent.
  • Quitclaim deed: this is a type of deed where the grantor doesn’t provide a warranty regarding the rightful possession of the property. It’s important to note that it’s primarily used in divorces (since the seller “quits” any rights to the property) or among family members and offers the least amount of legal protection.
  • Interspousal transfer deed: this is an interest transference among married couples, where the grantee pays no transfer tax.
  • Grant deed in lieu of foreclosure: in this case, the grantee is the bank instead of the buyer because a loan was needed for the purchase, but the mortgage wasn’t paid off.
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Disclaimer: The blog articles are intended for educational and informational purposes only. Nothing in the content is designed to be legal or financial advice.