Grantor vs. Grantee: What’s the Difference?

Gray Frame Corner
Gray Frame Corner

In the world of real estate, there are almost as many types of transactions, agreements, and contracts as there are properties to sell and people to buy them. Fortunately for the first-time homebuyer or budding real estate investor, you don’t need to know every term and equation when you’re just starting.  Today, we’re exploring one of these fundamentals: the grantor vs. grantee dynamic.

Understanding Grantors and Grantees

Understanding the grantor vs. grantee relationship is essential to any real estate investor’s knowledge. However, before we get into the finer points of how these two roles work, let’s take a quick look at what each one is at its most basic level.

What is a Grantor?

A grantor is a party in a transaction that transfers ownership or property rights of an asset to a grantee. In real estate sales, the grantor would be the party selling the property. In other cases, a grantor could be a landlord, owner, or lessor.

What is a Grantee?

In contrast, a grantee is a party who gains ownership or rights to an asset in a transaction. This party receives full or partial ownership rights to the property or asset. Often, a grantee will be the buyer in a real estate transaction, though a tenant, lessee, or mortgagee would also be a grantee.

Let’s briefly illustrate the grantor vs. grantee covenant with a few examples of how the conveyance of property rights can work between them.

Grantor vs. Grantee Examples

Seller/Buyer

In the simplest case, a cash real estate transaction, the seller acts as a grantor. They grant full property ownership in exchange for an agreed-upon purchase price. As a result, the buyer, or grantee, gains free and clear ownership rights to the asset, becoming the new owner.

Lessor/Lessee

A lease arrangement is another form of grantor/grantee relationship. In this case, the grantor is usually the property owner, such as a landlord. They grant temporary possession of the property to the lessee or grantee. 

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