What is a grantor? Let’s look at the definition and its meaning

What is a grantor? Let’s look at the definition and its meaning

What is a grantor? What is the grantor definition? How do you define grantor? How do you differentiate grantor vs grantee or grantee vs grantor? What does grantor mean? All of these are questions which have a single answer.

The grantor is actually a legal term that is used in real estate. Who is the grantor, or the deed grantor, and why do we need to define grantors? The grantor is the person who sells the property, such as a house.

They can give their title to a grantee, which is a buyer, which defines the grantor-grantee, or grantee grantor relationship.

Grantors will transfer the title definition real estate to their grantee via a legal document known as the deed. The closing attorneys will make sure that the transfer is recorded as proof that there was a legal transfer between the grantor and grantee.

A deed can be modified, by the grantee or grantor, to include restrictions and covenants that will determine who the property can be used, or sold, or reclaimed otherwise.

We’ve already answered the “what is a grantor and grantee” question, as well as defined the difference between grantor and grantee. Below you will find answers to some of the questions surrounding this situation, such as who is the grantor on a deed, what is a grantor on a loan, what is the definition of home, etc.

The grantor trust

An individual who creates a trust, and later transfers his assets into it, is known as a grantor in real estate. However, a “grantor trust”, is the entity that holds, and controls, the grantor’s assets.

All trusts have a trustee, beneficiaries, and grantor, and the relationship between the grantor and the others will determine if the trust is a non-grantor or grantor trust.

If we have a grantor trust, this gives the grantor meaning of power over the trust administration, as well as the assets.

The grantor here can change the trust, and even revoke it or terminate it. By definition grantor trusts don’t have a tax identification number, as the grantor notes everything on their own personal tax return.

A grantor trust is commonly revocable, and the grantor can either revoke it or terminate it. However, after the grantor’s passing, it becomes immediately irrevocable.

The trust needs to be administered according to the terms that were outlined in the document, by the trustee that was named. There can be no changes to the trust.

Why the legal language must be clear

This is an essential matter, for the deed to be able to clearly identify the grantee and grantor.

Deeds where the identities aren’t really clear, are at the risk of being questioned and may expose sellers and buyers to a lawsuit. This is why you should always make sure you have a title insurance policy.

What are the grantor’s roles in various deeds?

What kind of deed the grantor will convey varies. The buyers and sellers need to consult their attorneys and figure out what kind of deed they will receive or convey, and why.

It is a legal matter, and this is why many title companies don’t like providing such advice to sellers and buyers. And, the title company employees are prohibited from providing legal services as they aren’t lawyers.

The general warranty deed

If a grantor conveys a general warranty deed and confirms that it’s marketable and good, this makes him the person with the right to sell the property.

These general warranty deeds will protect against claims to the title that might be dating back to the origins of the property. These deeds often give the buyers the most protection in a real estate sale.

Not every state uses a general warranty deed, and you will need to check with your title insurer or closing company to determine what kind of deed is specific to your situation and location.

A general warranty deed commonly has the entire line of ownership, which affords the protection from any title issues in the future.

The special warranty deed

A grantor of such a deed will bear no responsibility for any title defects that might have happened before he owned the property.

In this situation, a buyer, or grantee, actually has limited protection because there’s always the chance that an issue that predates the seller, or grantor, could come back to haunt them.

This kind of deed will allow the grantor to limit the warranty of the title to anyone that is claiming from, under, by or through the grantor, but nobody prior to them.

If there were any defects before the grantor obtained ownership, they don’t apply to the grantor, and the grantor has no responsibility whatsoever of addressing them. This gives the grantee much less protection and a higher potential for unforeseen issues.

The grant deed

The grantor of a deed will give a guarantee that he hasn’t concurrently sold the same property to someone else as well.

They will also guarantee that, except the ones they have disclosed, there are no other additional encumbrances or liens on the property.

A quitclaim deed

With a quitclaim deed, the grantor doesn’t guarantee the title, or his right to convey the property by law. These kinds of deeds usually offer the least protection under the law, and they are seldom used when the parties don’t know each other.

A quitclaim deed is commonly used among family members, where you have uncertainties regarding any heirs, as well as divorces and other possession cases.

The creating of a deed

The deed isn’t permanent and fixed. If both parties agree to changes, the deed may evolve over time.

This will let any parties involved to arrange how the property will change hands in situations such as divorce, death, marriage or other events that might modify the agreement’s terms.

If there is uncertainty about a title’s clarity, there are title insurance policies that bridge this gap and offer the grantees a peace of mind.

And, when drafting the agreement, having an attorney help is recommended, to make sure the language is clear and there aren’t any issues whatsoever.

These relationships are usually pretty straightforward, but how they vary for different documents is a thing that’s important to understand.

Other documents that might be used to name grantors

Even though the grantor and grantee are usually named by real estate deeds, there are also other documents that require that the parties’ identity is clear. These documents include:

  • Vehicle sale and title documents
  • Real estate leases
  • Financing contracts
  • Business partnerships
  • Wills

Ending thoughts on what is a grantor

When discussing a deed, it is crucial that you understand each party’s role. This is especially important when discussing what the interest a grantor is conveying is, as well as what the grantee is receiving.

You should make sure all documents are posted and indexed, especially if you have a title searcher who wants an accurate chain of title to a specific piece of land.

The search should be in a position to find these documents, and use them to list the items that benefit and burden the property discussed.

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Houzez Staff

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