In any real estate transfer, the grantor is the person or entity giving up ownership and the grantee is the one receiving it. Both names appear on the deed, but the two roles carry very different obligations: the grantor signs, warrants (or doesn’t), and delivers; the grantee accepts, records, and lives with whatever protection the deed type provides. Getting the roles of grantor and grantee right, along with the deed language that connects them, is what separates a clean transfer from one that surfaces as a title problem years later.
What Each Party Actually Does
The grantor is the current owner. A valid deed needs the grantor’s signature, and that signature almost always has to be notarized. If the property has more than one owner, every owner is a grantor and every owner has to sign. Miss one, and the deed transfers only the signing owners’ shares; the non-signing owner’s interest stays exactly where it was. Title companies catch this at closing, which is a large part of what they’re paid for. Private family transfers that skip a closing often don’t catch it, and the problem tends to show up when someone later tries to sell or refinance.
The grantee is the receiver. Unlike the grantor, the grantee doesn’t have to sign the deed for it to be valid. What the grantee has to do is accept it, and acceptance is generally presumed when the transfer benefits them. In a typical sale, acceptance happens at closing when the grantee or their agent takes the executed deed. In a gift, handing over or mailing the deed is enough.
Between the signature and the acceptance sits delivery, which is the legal event that actually moves ownership. Delivery requires the grantor to intend an immediate and permanent transfer. A grantor who signs a deed and then locks it in a safe “for later” has not delivered it, and no transfer has occurred. Both parties must also be alive when delivery happens.
Most residential sales use an escrow agent to handle delivery. The grantor hands the signed deed to the escrow agent, who holds it until the grantee meets the purchase conditions, usually by wiring funds. Once the conditions are met, title passes automatically. The grantor can’t pull the deed back out of escrow, which is what protects the buyer from a seller who gets cold feet between signing and closing.
How the Deed Type Changes What the Grantee Gets
The type of deed determines how much protection the grantee receives and how much risk the grantor keeps. Many buyers never think to ask which deed they’re getting until something goes wrong.
General Warranty Deed
A general warranty deed gives the grantee the strongest protection available. The grantor guarantees the title against all defects, including problems that originated before the grantor ever owned the property. The guarantee covers the covenants of title: promises that the grantor owns the property, has the right to sell it, and will defend the grantee against future claims from anyone with a competing interest. If a defect turns up anywhere in the property’s history, the grantee can sue the grantor for damages. General warranty deeds are standard in most residential sales.
Special Warranty Deed
A special warranty deed narrows the grantor’s liability to defects that arose during the grantor’s own ownership. If the problem predates the grantor, the grantee has no claim. Commercial deals and bank-owned sales use special warranty deeds routinely because the seller doesn’t want to guarantee events from decades before they were involved.
Quitclaim Deed
A quitclaim deed transfers whatever interest the grantor happens to have, with no warranties at all. That interest might be full ownership, or it might be nothing. The grantee has no legal recourse if the title turns out to be defective. Quitclaim deeds show up between family members, divorcing spouses, and co-owners cleaning up small title issues. They are a poor fit for arm’s-length purchases because the grantee absorbs all the risk, and some title insurance policies won’t cover property acquired this way.
When the Grantor Isn’t a Single Person
The grantor role gets more complicated whenever the seller isn’t one individual signing for themselves.
Entities
Corporations, LLCs, trusts, and estates all regularly act as grantors. The question that matters is authority. For a corporation, that usually means a board resolution authorizing the sale. For a trust, the trustee has to be acting within the powers the trust agreement grants. For an estate, the executor or personal representative needs court-issued authority. A deed signed by someone without proper authorization can be challenged and potentially voided, so grantees and their title companies look at this closely. Entities also have to be in good standing with their state of formation for the deed to hold up.
Power of Attorney
If the grantor can’t attend closing, an agent holding a valid power of attorney can sign instead. The power of attorney has to specifically authorize real estate transactions; a general financial power of attorney may not be enough. The agent signs in a way that makes the representative relationship clear, such as “Jane Smith, attorney-in-fact for John Smith.” Most title companies and recording offices require the power of attorney itself to be recorded alongside the deed, and some require an affidavit from the agent confirming the principal is still alive and the power of attorney is still in effect.
Capacity
Individual grantors and grantees have to be of sound mind and old enough to sign, which in most states means at least eighteen. A deed signed by someone who lacked mental capacity or was underage can be voided by a court, which can unwind not just the original transfer but every sale that came after it.
How Multiple Grantees Hold Title
When two or more grantees appear on a deed, how they hold title determines what happens if one dies, wants to sell, or gets sued. The deed should say. The default varies by state and is rarely what people actually want.
Tenancy in Common
Tenancy in common is the default in most states when the deed is silent. Each co-owner holds a separate share they can sell, mortgage, or leave to anyone in their will. There is no right of survivorship, so a deceased owner’s share passes through their estate rather than to the other co-owners. This works well for business partners or unrelated co-buyers who want independent control over their shares.
Joint Tenancy With Right of Survivorship
Joint tenancy carries a right of survivorship: when one owner dies, their share automatically passes to the surviving owners outside of probate. The deed has to explicitly create this arrangement, usually with language like “as joint tenants with right of survivorship and not as tenants in common.” Survivorship overrides whatever the deceased owner’s will says, which makes joint tenancy a simple but inflexible estate planning tool.
Tenancy by the Entirety
Available only to married couples and recognized in roughly half the states, tenancy by the entirety works like joint tenancy with extra protection. Neither spouse can sell or mortgage their interest without the other’s consent, and in many states, a creditor of only one spouse can’t force a sale to satisfy the debt. Survivorship is automatic. If the couple divorces, this form of ownership typically converts to a tenancy in common.
Naming, Property Description, and Recording
Sloppy identification is one of the most common sources of title problems. The deed has to use each party’s full legal name, not a nickname or abbreviation. Someone whose legal name is “Miguel Rodriguez” can’t appear as “Mike Rodriguez” without creating a discrepancy that clouds the title. The deed should also state each party’s marital status and, for entities, the type of organization and state of formation, because those details drive what signatures future transfers will require.
Identifying the property is just as important. A street address alone isn’t enough. Deeds need a formal legal description, either lot and block from a recorded plat map or a surveyor’s metes and bounds description. Legal descriptions are precise and permanent in a way addresses aren’t, since municipalities renumber and annex. Vacant land, which may have no address at all, depends entirely on the legal description. An inaccurate one can convey the wrong parcel or create a gap in the chain of title that takes a lawsuit to fix.
A deed doesn’t have to be recorded to be valid between the grantor and grantee. Recording protects the grantee against everyone else. When the deed is filed with the county recorder, it creates constructive notice: every future buyer, lender, or creditor is presumed to know about the grantee’s ownership whether they checked or not. Without recording, a dishonest grantor could sell the same property twice, and depending on the state’s recording rules, the second buyer might end up with superior title. The grantee usually pays the recording fee, though that’s negotiable.
Taxes: What Each Side Pays and Why It Matters Later
The tax picture depends on whether the transfer is a sale, a gift, or an inheritance. This is where grantees most often get caught off guard.
Transfer Tax on Sales
Most states impose a real estate transfer tax when property is sold, with rates typically running from a fraction of a percent to around 3% of the sale price. About a third of states charge no state-level transfer tax, though local governments in those states may impose their own. The grantor is usually the party legally responsible, but who actually writes the check is often negotiated.
Gift Tax
When a grantor transfers property as a gift, federal gift tax rules can apply. The annual gift tax exclusion for 2026 is $19,000 per recipient, so a gift of property worth more than that requires the grantor to file a gift tax return.1Internal Revenue Service. Frequently Asked Questions on Gift Taxes Filing doesn’t necessarily mean paying tax, because the grantor can apply the excess against their lifetime exclusion, which is $15,000,000 for 2026.2Internal Revenue Service. Whats New — Estate and Gift Tax Most people never exhaust the lifetime amount, but the return still has to be filed.
The Basis Trap for Grantees
This is the piece families miss. When a grantee receives property as a gift, their cost basis for future capital gains is generally the donor’s original basis, not the current market value. Parents who bought a house for $80,000 in 1985 and gift it to a child when it’s worth $400,000 pass along the $80,000 basis. If the child sells for $400,000, they owe capital gains tax on $320,000.3Internal Revenue Service. Publication 551 (12/2025), Basis of Assets
Inherited property is treated very differently. When property passes through an estate after the owner dies, the grantee’s basis resets to the fair market value at the date of death. Same house, inherited instead of gifted: basis becomes $400,000, and a sale at $400,000 produces no taxable gain. This stepped-up basis is a major reason families sometimes leave property through a will rather than deeding it during life.