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What to Know About Grant Deeds


Gaining or changing ownership over real estate can be complicated. Anyone interested should develop his or her know-how on all the involved documentation before taking on the challenge. If you are interested in acquiring a title or finding a new owner for your property, you’ll need to know about grant deeds. Grant deeds are used to sell or transfer real property. This legal document identifies the grantor (seller) and the grantee (buyer). Here is an overview of what such a document does and doesn’t do.

Consider working with a financial advisor for valuable insight and guidance on real estate investing.

What Is a Grant Deed?

Grant deeds, sometimes called special warranty deeds, limited warranty deeds or covenant deeds, are used to give someone rights to a specific asset. As long as the individual meets the current owner’s conditions, he or she gains possession of the asset. In real estate, a grant deed functions as a legal document that transfers the ownership of a real property, like a house or vehicle, from one party to another.

Grant deeds are generally the most common type of deed used when someone sells property. This type of document comes in multiple formats depending on the involved parties. So, grant deeds can fit a number of situations. For example, a couple may be going through a divorce. During the divorce, one spouse decides to transfer ownership of the home he or she shared to the other spouse. In that case, the persons use a type of grand deed known as an interspousal transfer grant deed.

What It Does and Doesn’t Do

In effect, the grant deed protects the involved parties.

It asserts that the grantor owns the property free and clear so that the new owner can handle the asset as he or she sees fit. Essentially, a grant deed declares the original owner’s full rights over the property, safeguarding the new owner’s rights after the transfer. It also provides a warranty for title problems or encumbrances, like a lien, that arose while the grantor owned the property. It does not provide a warranty for title problems that may have arisen before the grantor owned the property.

What’s Included in a Grant Deed

Toy house made of wooden blocks

A grant deed states that the property has not been sold to another party. It includes the necessary information so that one property owner can transfer it to the next. It provides the name of either the person, group or entity that is giving up ownership. It also states which person, group or entity will receive ownership of the property. The document states both parties’ contact information, such as their billing address, for future reference.

In addition, the grant deed describes the real property itself. The details depend on the property but can include information such as its physical location (city, county, state and even geographic coordinates), property boundaries and sewer lines.

And, of course, the deed lays out the terms of the transfer. It confirms the grantee’s rights as the new owner and what the old owner receives in compensation. Depending on the situation, further information may be included, such as a list of conditions for the grantee.

State laws vary. So, one state may require additional elements in a grant deed that another doesn’t. Always research the requirements for any legal documents you need ahead of time.

Other Types of Deeds

Grant deeds aren’t the only type of deeds. There are other various deeds that may work better for your situation. For example, you may want a deed that provides you with more protection. In that case, a general warranty deed is likely your better option. With a warranty deed, the grantor ensures no underlying problems or encumbrances come with the property’s title once you own it. That promise applies to both the time span the grantor owned the property as well as before. If a problem does arise, then the grantor must pay any resulting legal costs. In essence, the grantor promises there are no undisclosed problems with the title and if there is, he or she will defend it against claims.

Another deed commonly used in divorces is the quitclaim deed (although it’s used in multiple situations). When a grantor uses a quitclaim deed, he or she releases ownership rights; however, the person does this without promising any actual interest in the property. Family members also use them to transfer property between one another, like a trust or business. Unlike the warranty deed, the quitclaim deed does not protect the buyer. However, they’re an efficient and quick way to transfer a title.

You may have a unique situation, though. In that case, you may end up using a special purpose deed. This offers little protection and usually involves a court or supervision. Some of the most common forms include tax deeds, deed of gift, administrator’s deed, executor’s deed and deed in lieu of foreclosure.

The Takeaway

House being held in the palm of a man's hand

The type of deed you use will depend on your property and situation. While some offer more protections than others, each one serves a specific purpose. Grant deeds offer two guarantees that can help safeguard both the grantor and the grantee. However, warranty deeds come with an additional third guarantee: that the grantor will defend the property against claims. So, grant deeds have a place but may not always be the choice for you.

Tips for Investing 

  • Preparing for retirement comes with a lot of boxes to check. One of which is saving enough. You may already have a secure emergency fund and a range set of stock investments to help you meet your retirement savings goals. But expanding your income and investments may be the next step. Real estate offers returns and diversification for the wise investor.
  • Real estate investments are a great way to diversify your portfolio and create new streams of income. Picking up new investments is always a risk, though. You may want guidance navigating or managing your portfolio with these changes. Working with a financial advisor can help. With SmartAsset’s matching tool, you can find the financial professional. All it takes is a few questions on your current situation and goals to match with up to three local advisors. Then, it’s up to you to find the one that fits your needs. If you’re ready, get started now.
  • Use SmartAsset’s asset allocation calculator to determine how to best split your money between stocks, bonds and cash. The calculator bases its recommendation on your risk profile and offers a breakdown of each asset class.

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