What is a Grant Deed?

A grant deed, often called a special or limited warranty deed, is a legal instrument that transfers natural land from the prior owner (grantor) to the current owner (grantee). A gift deed guarantees:

• The grantor has not sold the property.
• Unless stated in the deed, the property was unencumbered during the grantor’s ownership. The grantor doesn’t guarantee title faults caused before possession.

A grant deed in writing must include the grantor and grantee’s names, property description (lot number, tract number, city, county, and state), language of conveyance (e.g., “grant, bargain, sell, and convey”), and the grantor’s signature.

Uses and Content of Grant Deed

A deed is a legal document that transfers real estate ownership from the seller to the buyer upon execution and delivery. Quitclaims, universal warranties, and grant deeds exist. The risks and protections of each deed vary for purchasers and sellers.

The gift document guarantees two things: the grantor got ownership, and the property was unencumbered. There is no information about paying legal fees to fight a title claim. It also does not guarantee claims made before the grantor obtained ownership.

This deed gives buyers less protection than a general warranty deed, which guarantees a good, clear title. Grant deeds protect buyers more than quitclaim deeds with no covenants or guarantees.

Uses

Transferring natural land through grant deeds is common in tax and foreclosure transactions. Grant deeds offer protection between quitclaims and general warranty deeds.

Different grant deeds exist based on who transfers property. An interspousal transfer grant deed transfers real estate between spouses, commonly after a divorce.

Content

Grantor and grantee names, dates, property descriptions, and grantor signatures are required on all deeds. Most deeds need notary stamps and witness signatures.

Grant deeds also list warranties. The state’s legislation governs a grant deed’s content and structure.

Considerations for Real Estate Investment

Real estate, including property, is considered an asset class alongside stocks, bonds, cash, and alternative assets like private equity and venture capital.

Real property includes land and any related property (buildings, ponds, canals, roads, and machinery) and the right to use, control, and dispose of it.

Location is unique in real estate investing since it affects pricing. Local variables, including employment, economics, crime, transportation, schools, and property taxes, impact residential real estate values.

Although less critical, these variables are equally important in commercial real estate, which is generally more valued per square foot. Commercial rental real estate is more regulated than residential real estate, with country-, state-, and city-level rules. Zoning laws can complicate commercial real estate investments and increase tenant turnover risk.

Investors can invest in real estate directly (grant deeds) or indirectly (REITs or MBS).

Different Deeds

Other deed modifications include:

• A broad warranty deed offers maximum buyer protection but increases grantor liability. A universal warranty deed grantor guarantees clear title to the property. Most real estate deed transfers employ this deed.
• Quitclaim documents, or non-warranty deeds, do not guarantee clear title or lawful property transfer rights. Fixed title mistakes and family property transfers typically employ this deed, which offers the least protection to the grantee.
• Tax deeds are legal documents transferring property title to a government entity when the owner fails to pay property taxes. A tax deed authorizes government agencies to auction property for unpaid taxes. The buyer receives the property after the sale. Auctions host tax-deed sales.

Is a grant deed a mortgage?

Grant deeds are not mortgages. Grant deeds and other documents transfer real estate ownership from the seller to the buyer. Alternatively, a mortgage involves using real estate as collateral for debt repayment.

What is the difference between a grant and a quitclaim deed?

Grant deeds protect purchasers more than quitclaim deeds when transferring property between sellers and buyers. Grant deed grantors guarantee the property was unencumbered during their tenure unless otherwise stated.

A quitclaim deed, on the other hand, transmits merely the grantor’s interest upon delivery and has no covenants or guarantees. If the grantor has no interest in the property, a quitclaim deed gives the grantee nothing.

What’s the most robust deed?

A broad warranty deed protects real estate buyers more than any other. This deed is better for the grantee but leaves the grantor most liable. The grantor usually has numerous covenants:

• The covenant of seizin—the grantor guarantees ownership and lawful conveyance
• The grantor guarantees the property is free of liens and encumbrances.
• The grantor safeguards the grantee’s title against third-party claims under the covenant of peaceful enjoyment.

Bottom Line

A deed is a written document that grants title or interest in natural land upon execution and delivery. Grant deeds provide more buyer protection than quitclaim deeds but less than general warranty deeds.

A deed specifies the grantor’s duties and the grantee’s protection. Whether buying or selling real estate, you must grasp the deed type. State real estate laws differ. A skilled real estate attorney, broker, or agent can answer your queries.

Conclusion

• A grant deed transfers real estate ownership during tax or foreclosure transactions.
• It provides better buyer protection than a quitclaim deed but less than a general warranty deed.
• A grant deed must have the grantor and grantee’s names, a description of the property, words of conveyance, and the grantor’s signature to be legitimate.
• Some states need a notary to witness deed transfers.