The terms grantor and grantee pop up in the real estate industry in deeds and in the property's ownership history. By knowing who the grantor and grantees are, you can identity current property owners and even follow the history of a particular piece of real estate you're interested in.
What Is a Grantor?
A grantor is a person or legal entity, such as a business, transferring property ownership to another person or entity on a deed. The grantor is usually the current property owner. However, a grantor on a deed may be anyone who has some sort of ownership interest in a property she wants to give to someone else. For example, John and Mary each has a 50 percent interest in a house. Mary wants to give her 50 percent interest to Sue. Mary does so on a deed and is shown as the grantor, but she can only give Sue her 50 percent. John still keeps his 50 percent.
A Grantee's Role
The grantee is the person receiving receiving property ownership interest on a deed. A grantee may receive total ownership of a property from the grantor or just partial interest, depending on what the grantor has the right to give. A grantee is usually shown on a deed underneath the grantor. For example, the deed may list Mary near the top with "Grantor" after her name and then "to" on the next line. Underneath "to" is the grantee's name, which is clearly labeled as "Grantee."
Most localities use the terms grantor and grantee to identify people involved in real estate transactions as part of their land records indexing system. People who work in the title insurance industry need to research ownership histories so they can identify potential problems with a property's title, or chain of owners. An issue in the title can make it impossible to guarantee the current owner actually has a legal right to the real estate. The index is arranged by grantor and grantee so real estate professionals can search by former and current owner names to follow the property's history.
Parties of the First and Second Part
A grantor may also be referred to as the "party of the first part," while the grantee is shown as the "party of the second part." The terms identify the grantor as the first party because he is the giver and the first party listed on the deed, while the grantee is the receiver and in the second position, underneath the grantor.