What Is a Grant Deed?

A grant deed is a legal document used to transfer ownership of real property. The grantor is the person transferring the property, and each grantor must sign the deed. 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). The grant deed shows that the title has not already been granted to another person.

Key Takeaways

  • A grant deed is a legal document used to transfer ownership of real property and proving that the title has not already been granted to another person.
  • A grant deed contains the name of the person or entity transferring the property and a full description of the property's details such as lot number, tract number and city and state.
  • A notary usually witnesses the actual signing of a grant deed.

Understanding a Grant Deed

The grant deed is written proof that an individual owns a property. The grant deed also provides title guarantees to the new owner — 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.

There are numerous types of grant 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 does not need to be reassessed for property tax purposes. A notary usually witnesses the actual signing of a grant deed, and the grantee usually pays a small fee to record the deed with the county government.

Special Considerations for Grant Deeds

Real estate, including real property, is often described as an asset class along with stocks, bonds, cash, and alternative investments like 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).