Kim Porter began her career as a writer and an editor focusing on personal finance in 2010. Since then, her work has been published everywhere from Forbes Advisor to U.S. News & World Report, Fortune, NextAdvisor, Credit Karma, Bankrate, and more.
Kim Porter began her career as a writer and an editor focusing on personal finance in 2010. Since then, her work has been published everywhere from Forbes Advisor to U.S. News & World Report, Fortune, NextAdvisor, Credit Karma, Bankrate, and more.
Written ByKim Porter began her career as a writer and an editor focusing on personal finance in 2010. Since then, her work has been published everywhere from Forbes Advisor to U.S. News & World Report, Fortune, NextAdvisor, Credit Karma, Bankrate, and more.
Kim Porter began her career as a writer and an editor focusing on personal finance in 2010. Since then, her work has been published everywhere from Forbes Advisor to U.S. News & World Report, Fortune, NextAdvisor, Credit Karma, Bankrate, and more.
Chris Jennings Loans & Mortgages EditorChris Jennings is a writer and editor with more than seven years of experience in the personal finance and mortgage space. He enjoys simplifying complex mortgage topics for first-time homebuyers and homeowners alike. His work has been featured in a n.
Chris Jennings Loans & Mortgages EditorChris Jennings is a writer and editor with more than seven years of experience in the personal finance and mortgage space. He enjoys simplifying complex mortgage topics for first-time homebuyers and homeowners alike. His work has been featured in a n.
Chris Jennings Loans & Mortgages EditorChris Jennings is a writer and editor with more than seven years of experience in the personal finance and mortgage space. He enjoys simplifying complex mortgage topics for first-time homebuyers and homeowners alike. His work has been featured in a n.
Chris Jennings Loans & Mortgages EditorChris Jennings is a writer and editor with more than seven years of experience in the personal finance and mortgage space. He enjoys simplifying complex mortgage topics for first-time homebuyers and homeowners alike. His work has been featured in a n.
| Loans & Mortgages Editor
Updated: May 23, 2023, 12:59pm
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When you’re buying a piece of property, it’s important to understand the various terms you might encounter. “Grantor” and “grantee” are legal terms that respectively apply to the seller and buyer. In a rental agreement, the terms apply to the landlord and tenant. The relationship between grantor and grantee, their rights and their responsibilities are outlined in a legal contract called a deed.
In a real estate deal, the grantor is the person who transfers ownership of their property to someone else—the grantee. You might know the grantor as the seller in a home transaction or the landlord who rents their property to someone else. The grantor may be any entity that owns and wants to sell or rent out their property.
The grantee represents the other side of the real estate transaction: the buyer or the renter. They acquire property from the grantor either through a home sale or rental.
When property changes hands, the grantor transfers the legal rights to own, use and/or sell the property to the grantee. This legal right is known as the “title,” and the transfer of title is granted using a legal document called a property deed. There are different types of deeds to define the terms of the transfer, depending on the state where the grantor lives.
A warranty deed conveys property ownership from the grantor to the grantee, and it offers the highest level of protection for the grantee. The grantor confirms there are no undisclosed legal issues with the property title or the property itself. If the grantee discovers issues later on—like easements, tax liens or outstanding mortgages—the grantor must pay the legal costs to defend the grantee. This protection covers the time before and during the grantor’s ownership.
Some homebuyers confuse warranty deeds with home warranties. Both of these offer protection to the buyer, but in different ways. A home warranty is a contract that pays to repair or replace home systems and appliances if they break down after the home sale, usually for a period of one year.
A special warranty deed also transfers property ownership from a grantor to a grantee. The grantor pledges there are no encumbrances to the title—liens, for example—but only while they owned the property. The grantor won’t be liable for issues that arose from previous owners. This type of deed is most often used by temporary owners, such as a bank that forecloses a property and puts it up for sale.
A grant deed also transfers property ownership from the grantor to the grantee. It guarantees that the grantor hasn’t transferred the property to anyone else and hasn’t encountered title problems while they owned the property. There’s less protection for the grantee because the grantor won’t be liable for legal costs for defending the title later on.
A quitclaim deed transfers property ownership from the grantor to the grantee, but it doesn’t guarantee the grantor holds the property title or that the title can be transferred. This type of deed offers no protection for the grantee if there are claims against the title later on. Because the quitclaim deed requires a level of trust, they’re typically only used in certain situations, like property transfers between family members.
A special purpose deed is used when someone is transferring property ownership on behalf of another entity, such as an executor administering an estate. Because the grantor is acting in an official capacity, they won’t be liable if the grantee faces claims against the title later on.
A deed in lieu of foreclosure allows a homeowner to transfer property ownership back to their lender. A homeowner may choose to take this step when they can no longer afford mortgage payments and want to avoid a lengthy foreclosure process. In some cases, the grantor won’t be personally liable for the deficiency balance, which is the amount remaining on the mortgage. But the lender will need to agree in writing to waive that balance.
This type of deed transfers property ownership from one spouse to the other. It’s typically used in divorce cases where both spouses shared ownership of the property. If the property has an outstanding mortgage, the spouse who receives the property typically sells it or refinances the loan so it’s in their name only.
With a deed of lease, the grantor gives a grantee the right to temporarily use their property. The two parties are usually defined as a landlord (the grantor) and one or more tenants (the grantees). The deed of lease outlines the terms and conditions of the lease agreement and ensures all parties understand their rights and responsibilities.
Grantors and grantees represent the two sides of a real estate transaction, with the grantor transferring ownership or temporary use of their property to the grantee.
If the transaction is a home sale, the grantee will typically order a title search before closing. The title search confirms who legally owns the property and whether there are claims or liens against it. If everything checks out, the grantor and grantee sign the deed to make the transfer official.
There are several types of deeds, and they provide different degrees of protection for the parties involved. But even with deeds that offer higher levels of protection, the buyer might want to buy title insurance for additional coverage against unknown property issues or encumbrances.
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