A grant deed, also defined as a special or limited warranty deed, is indeed a legal document used to transfer real property from one owner to another (the grantee). A grant deed warrants that:
 

1. The grantor has not transferred the property to anyone else, and

2. The grantor have not sold the property.

Grant Deed

The property was not encumbered during the grantor's ownership, unless otherwise stated in the deed. Before taking possession of the property, any title defects that may have existed are not guaranteed by the grantor.

A grant deed must be in writing and contain the grantor's and grantee's names, a legal description of the property being transferred (i.e., lot number, tract number, city, county, and state), and the grantor's signature.

• A grant deed is used to transfer real property ownership, typically in conjunction with tax or foreclosure sales.

• It provides the buyer with greater protection than a quitclaim deed but less than a general warranty deed.

• For a grant deed to be valid, it must include the names of the grantor and grantee, a summary of the property being transferred, the grantor's signature, and the words of conveyance.

• Some states mandate the presence of a notary public during the transfer of a deed.

Understanding Grant Deeds

A deed is a legal document that, when executed and delivered, transfers ownership of or an interest in real property from a seller to a buyer. There are a variety of deeds, such as quitclaim deeds, general warranty deeds, and grant deeds. Each type of deed offers buyers and sellers varying degrees of protection (and risks).

A grant deed includes two warranties: that the grantor received title to the property and that the grantor did not encumber the property. This type of deed provides less protection to buyers than a general warranty deed, in which the grantor guarantees the property's clear title. However, a grant deed provides buyers with greater protection than a quitclaim deed, which contains no express or implied covenants or warranties.

Grant deeds are frequently used in conjunction with tax and foreclosure sales to transfer real estate. Depending on who transfers property to whom, there are various types of grant deeds. For instance, an interspousal transfer grant deed is utilized to transfer property from one spouse to another (often during a divorce).

Real Estate Investing Considerations

In addition to stocks, bonds, cash, and alternative investments such as private equity and venture capital, real estate is frequently categorized as a separate asset class.

Real property consists of land and any property directly attached to it (such as buildings, ponds, canals, roads, and equipment) and can also include the right to use, control, and dispose of the land.

Real estate is unique among investments in that its location has a significant impact on prices. For instance, residential real estate values are influenced by factors such as the area's employment rate, economy, crime rate, transportation facilities, school quality, and other municipal services, as well as property taxes.

These factors are also relevant in commercial real estate, which is frequently more valuable per square foot than residential real estate, albeit to a lesser extent. Commercial rental property is more heavily regulated than residential rental property, with specific regulations varying across countries, states, and even cities. In addition to increasing the complexity of commercial real estate investments, zoning regulations can increase the risk of tenant turnover.

Those who are interested can invest in real estate directly (grant deeds may be involved) or indirectly by purchasing shares of real estate investment trusts (REITs) or mortgage-backed securities (MBS).

Other Types of Deeds

Other variations of a deed include (but are not limited to) the following:

General Warranty Deeds:

A general warranty deed offers the most protection to the buyer, but imposes the most liability on the grantor. The grantor of a general warranty deed guarantees the property's clear and marketable title. This type of deed is utilized for the majority of real estate deed transfers.

Quitclaim Deeds:

A quitclaim deed, also known as a non-warranty deed, does not guarantee clear title or the grantor's legal right to transfer the property. It offers the least protection of any deed to the grantee and is commonly used to correct title errors and transfer property between family members.

Tax Deeds:

This is a legal document that grants the government ownership of a property if the owner fails to pay property taxes. A tax deed authorizes the government agency to sell a property in order to collect delinquent taxes. Once a property is sold, it is transferred to the buyer. These transactions are referred to as "tax deed sales" and are typically conducted through auctions.

Is a Grant Deed the Same as Mortgage?

Grant deeds are distinct from mortgages. Deeds, including grant deeds, are used to transfer real estate ownership from a seller to a buyer. In contrast, a mortgage is a transfer or pledge of real property as security (collateral) for the repayment of a debt.

Difference Between Grant Deed and Quitclaim?

Deeds of grant and quitclaim are used to transfer property between sellers and purchasers. However, grant deeds provide buyers with greater protection than quitclaim deeds. A grantor of a grant deed warrants that the property was not encumbered while they held title (except as noted in the deed).

In contrast, a quitclaim does not contain any covenants or warranties and conveys only the interest (if any) that the grantor may have at the time the deed is delivered. The grantee acquires nothing by virtue of a quitclaim deed if the grantor has no interest in the property.

What Is the Strongest in all Deed?

A general warranty deed provides greater protection for real estate purchasers than any other type of deed. Although it is the best deed for the grantee, it imposes the most liability on the grantor. Typically, the grantor is bound by several covenants, including:

• The covenant of seisin - the grantor warrants that they own the property and have the legal authority to convey it.

• The covenant against liens and encumbrances—the grantor warrants that the property is free of liens and encumbrances.

• The covenant of quiet enjoyment - the grantor warrants that the grantee's title will be free from third-party claims.

The Bottom Line

A deed is a written document that, when executed and delivered, conveys title to or an interest in real property. In terms of buyer protections, grant deeds fall in the middle of the spectrum, providing more protection than quitclaim deeds but less than general warranty deeds.

A deed specifies the obligations of the grantor and the level of protection the grantee receives. Therefore, it is crucial to comprehend the type of deed used in a real estate transaction, regardless of whether you are the buyer or the seller. Similarly, state laws regarding real estate vary. If you have questions, consult a qualified real estate attorney, broker, or agent.