Grant Deed

What Is a Grant Deed?

A grant deed is a legal document used to transfer ownership of real property. It is an official record that indicates a title has not already been granted to another person.

A grant deed contains the name of the person or entity transferring the property (the grantor); the legal description of the property being transferred (i.e., lot number, tract number, city, county, and state); and the name of the person or entity that the property is being transferred to (the grantee). Each grantor must sign the grant deed to make it legally valid.

Understanding a Grant Deed

A deed is a signed legal document that grants its holder specific rights to an asset — provided that they meet a number of conditions. They are most commonly used to transfer the ownership of automobiles or land between two parties. The purpose of a deed is to transfer title, a legal document proving ownership of a property or asset, to another person.

A grant deed is a form of such written proof that an individual owns a property that also provides title guarantees to the new owner — i.e., insurance that the property title is free of claims or liens and the new owner has the right to sell or transfer the property to another. These types of deeds do not necessarily need to be recorded or notarized, although it is generally in the best interests of the grantee to ensure that this is done.

There are numerous types of grant deeds depending on who is transferring property to whom. For example, an interspousal transfer grant deed is used to transfer ownership of real property from one spouse to another (often during a divorce).

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

A property that is transferred with a grant deed typically does not need to be re-assessed for property tax purposes.

Special Considerations

Real estate, including real property, is often described as an asset class along with stocks, bonds, cash, and alternative investments such as private equity and venture capital. Grant deeds often help in the transfer of real estate from one owner to another.

Real estate sales are unique in that the natural surroundings and immediate geographic area of properties significantly impact prices. For example, residential real estate values are affected by local factors such as the area's employment rate, economy, crime rates, transportation facilities, quality of schools, and other municipal services, along with property taxes.

In commercial real estate, which is often more valuable per square foot than residential real estate, these factors are also pertinent although less so. Commercial rental real estate is more heavily regulated than residential real estate, with specific regulations existing between countries, states, and even cities and counties. Zoning regulations can add a further layer of complexity to commercial real estate investments along with the risk of tenant turnover.

Those interested can invest directly in real estate (where grant deeds would come into play) or indirectly by buying shares in real estate investment trusts (REITs) or mortgage-backed securities (MBS).

Other Types of Deed

The grant deed is the simplest and most straightforward type of deed used. There are also other variations of a deed, including: