GRANT DEED: Definition, How It Works & Where To Get It

grant deed

If you are transferring or obtaining title to real estate, you should be aware of the numerous forms of deeds that can be used. This includes grant deed, which is very common when purchasing property through a tax or foreclosure sale.

What is a Grant Deed?

A grant deed is a legal instrument that allows certain property transfers to take place between the previous owner (the grantor) and the new owner (the grantee). It is extended when ownership of a real property changes hands in exchange for money or other considerations. It is also known as a limited warranty deed or special warranty deed.

A grant deed certifies that the grantor has the legal right to sell the property and that the grantee will not face any encumbrances from the seller’s ownership. Encumbrances include a sullied title (the official rights to ownership), existing liens (debt) on the land, unpaid property taxes, unreported easements, and other circumstances that could jeopardize the buyer’s ownership rights.

What is a Deed?

A deed is a legal document that formalizes the transfer of property from one owner to another. A grant deed, for example, includes a legal description of the land, as well as its mailing address and tax parcel number, as well as the names of the seller and buyer.

6 Different Types of Deeds

Depending on their relationship with the buyer or grantee, a homeowner wanting to transfer ownership often works with one of six types of deeds.

#1. Quitclaim Deed

A quitclaim deed transfers property from one owner to another. However, it does not guarantee a clear title or indicates that the grantor has the authority to deed (transfer) the property. Quitclaim deeds are commonly used to correct title issues, transfer property between family members or to a living trust, or add or remove people from an ownership group.

#2. General Warranty Deed

A general warranty deed is an agreement that accompanies the commercial sale of the real deed. It is essentially an affidavit verifying that the grantor has the legal right to deed the property to the grantee, and it offers a guarantee of title for the whole history of the property. It ensures that the buyer will encounter no claims, tax liens, or other encumbrances from whatever time the property has been owned.

#3. Grant deed

A grant deed acts similarly to a general warranty deed, with one important exception: it only assures clear title and the absence of encumbrances during the seller’s ownership of the land. This sort of deed gives a buyer less protection than a general warranty deed, which guarantees a clear title throughout the property’s ownership history. While a grant deed does not protect the buyer from claims made during a previous time of ownership, it does shield the seller from liability for these claims.

#4. Bargain and Sale Deed

A bargain and sale deed confirms that a grantor has the right to deed the title to the property for sale. However, it does not guarantee that the grantee will receive their property free of encumbrances. These deeds are frequently associated with property foreclosure transactions. Before purchasing a foreclosed home, some buyers conduct a title check, get title insurance, and hire a real estate attorney to reduce the dangers associated with a bargain and sale deed.

#5. Deed of trust

A deed of trust is a legal instrument that comes with some home loans. It acts as an agreement between three parties: a beneficiary (lender), a grantor (borrower), and a trustee (a neutral third party such as a title company). It creates a lien on real estate that expires after the borrower has fully repaid the debt.

#6. Mortgage deed

A mortgage deed is similar to a deed of trust, with one major distinction. This sort of deed only has two parties: a lender and a borrower. A mortgage deed does not take into account the trustee, who retains the title under a deed of trust. Until the mortgage is paid in full, title to the property is divided evenly between the lender and the borrower. At that point, the title belongs solely to the homeowner, who is no longer in debt.

How Does Grant Deed Work?

A grant deed is a sort of warranty deed that is used in conjunction with the sale of real property in exchange for money or other real consideration. These property deeds have several important features.

  • Property legal description:

A grant deed formally describes the property, including its street address and description in county records. In some situations, the deed may include the parcel number assigned by the property tax assessor (APN).

A title company validates that the title to a building or land parcel is free and clear of any third-party claims. Grant deeds guarantee that a title search was performed and that no claims from third parties were discovered during the seller’s ownership of the property. They do not cover encumbrances from former owners’ tenures, unlike general warranty deeds.

  • Notarized and filed:

According to most state statutes, all warranty deeds must be authenticated by a notary public and recorded in the public records of a county recorder or county clerk. Depending on your municipality, this could result in a transfer tax.

Grant deed forms and templates are available on the websites of several towns and legal services providers. Before deeding their ownership stakes to someone else, property owners should seek official legal guidance.

When am I able to use a Grant Deed?

This Grant Deed can be utilized if and only if the following conditions are met:

  • You’re buying a home and want to ensure that it won’t be sold to someone else.
  • You are purchasing property and want to ensure that there are no liens or limitations attached to it.
  • You’re selling property and want to give the buyer some assurances.
  • Property must be transferred to a separate business or trust.
  • You want to make a property donation to another individual or entity.

How to Acquire a Grant Deed

Getting a grant deed is easier than you think. First, you must locate a property that you wish to acquire. You can look through the classified advertisements in your local newspaper, conduct a fast web search, or ask your friends and family.

Foreclosures and tax sales are two of the most prevalent transfers involving grant deeds. These sales are beneficial since you may be able to save money on the purchase agreement because these types of sales are typically held at auctions. Check your local classified advertising or contact your local government agency to find a property auction near you. Real estate agents are often able to assist as well.

During the negotiation stage of a sale, a grant deed might be obtained. Keep in mind that, while a grant deed provides some protection, it is not always the ideal option for transferring real estate ownership. General warranty deeds provide the most protection and are the finest choice.

When a general warranty deed is not available, you should pursue a grant deed. If you want to add an extra layer of security while purchasing a grant deed, you may conduct a deed search to learn more about the property you’re interested in before closing the sale.

A grant deed’s content

Any deed must include the date, the names of the grantor and grantee, a description of the property being transferred, and the grantor’s signature. As required by state law, there are usually witness signatures or a notary public acknowledgement.

A grant deed will also include a declaration outlining the guarantees that are included. A typical grant deed warranty statement might read: “The Grantor warranties that the Grantor is lawfully seized in fee simple of said property, and that said property is free and clear of all liens and encumbrances incurred during the Grantor’s ownership, except as herein set forth, and except for taxes due for the current and subsequent years, and except for any restrictions or easements of record.”

In some states, the nature of the warranties may be implied by the title of the deed, without the need to mention them explicitly in the deed. For example, if the deed is labelled “Grant Deed,” the state law warranties immediately apply.

State law governs the specific content, format, and execution requirements for deeds. As a result, you must ensure that you meet the standards of the state in which the property is located.

Who is the person who signs a Grant Deed?

Aside from the notarization requirements, the grantor is the only party that must sign the Grant Deed (in most cases the seller). Most states require that the deed be recognized by a public notary in addition to the grantor signing it. While the information in the Grant Deed must contain the new owner of the property, the recipient is not legally obligated to sign the Grant Deed.

What’s the distinction between a Grant Deed and a Title?

A title is a legal document that proves ownership. The owner’s details, including their name and signature, will be included in the Title. In contrast, a Grant Deed is a legal instrument used to convey (transfer) property from one person to another. It’s useful to emphasize “grant” in Grant Deed since one person is “giving” the property to another, comparable to the concept of granting a wish.

What is the average time it takes to record a Grant Deed?

The time it takes to record a Grant Deed varies by jurisdiction. Busier locations will, by definition, take longer to process. You can inquire about the projected timeline at the office where the deed will be recorded. Many counties now allow free online access to real estate records, so you may be able to check there on a regular basis.

The County Recorder’s Office is the location where your deed will be recorded. It is also known as a Register of Deeds or a Land Registry office. In many cases, the office is housed in the county courthouse.

The difference between a grant deed and a warranty deed

Grant deeds are not the same as other forms of deeds, such as warranty deeds.

A warranty deed, which is commonly utilized when purchasing a home from a builder or with the assistance of a real estate agent, assures that the grantor has a defensible ownership interest in the property that may be transferred to the grantee.

A general warranty deed promises that the new owner will have the good title free of any encumbrances, debts, or liens and that the seller or grantor agrees to defend the title against any third-party claims. By contrast, a grant deed does not include any agreement to defend the title against challenges.

A special warranty deed is similar to a general warranty deed in that the grantor only guarantees that the title was free of liens, debts, or encumbrances during the grantor’s ownership of the property — the deed does not guarantee that title issues did not exist prior to the grantor taking ownership. A special warranty deed is frequently used to convey trust or estate.

In conclusion

Although grant deeds serve a purpose, there is no warranty associated with them, so proceed with caution if you are involved in a real estate transaction involving one. When dealing with this form of a deed, it’s preferable to hire a real estate attorney and a title firm.

For example, there could be a tax lien or a mechanic’s lien that you, as the new owner, will have to pay to secure clear title to the real estate. The only way to ensure that you are protected from clouded title issues like these is to have a real estate attorney evaluate your title paperwork before closing on a deal.

Even so, double-check the deed’s description. An attorney or their paralegal may just copy from a previous deed, which may contain inaccuracies.

Consider acquiring an owner’s title insurance policy to further safeguard yourself, advises Whitman. This is distinct from the lender’s policy that a mortgage lender demands you to purchase because it protects you as the owner. Ensure that the title company searches for any breaks in the chain of title, liens, unmet encumbrances, and separately recorded restrictions during the title search.

Grant Deed FAQs

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

A grant deed is a transaction between two people or entities in which the property is not secured as collateral. Mortgage firms employ a deed of trust when a homeowner takes out a loan against the property.

Is a grant deed proof of ownership?

A title is a legal document that proves ownership. The owner’s details, including their name and signature, will be included in the Title. In contrast, a Grant Deed is a legal instrument used to convey (transfer) property from one person to another.

What does a grant deed mean in California?

A grant deed is a legal instrument used in California to promise to a buyer that the buyer will bear no responsibility for any future unforeseeable claims or encumbrances placed against the property, as long as the claim pre-dates the buyer’s property closing.

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