Title Documents
Grant Deed vs Deed of Trust?
With respect to title reports and title insurance, you can tend to hear a variety of terms that may sound similar and create some confusion. Two of the more common terms are “grant deed” and “deed of trust”, which are two distinctively different documents with distinctively different purposes.
A grant deed is the primary document that conveys title or ownership from one party to the other in a real estate transaction. This tends to be a very simple form of 2 – 3 pages that indicates the current owner’s name (grantor) with a conveyance to the new owner (grantee). This grant deed contains no information on the terms of transaction, but primarily contains the legal description of the property, the grantor name, and the grantee name. The grantor must sign the grant deed to authorize the conveyance, while I have sometimes seen the grantee signing for acceptance of the property. This grant deed needs to be recorded at the County Recorder to make the transaction and conveyance legal.
The deed of trust is a document that provides security to a lender. If a lender is making a loan that is secured by real estate, a note or loan agreement will be signed by the lender and borrower, which stipulates the amount of the loan, interest rate, maturity, and other loan terms. But it is the deed of trust that is a recorded document that provides the security, and this deed of trust is typically a shorter document that does not include most of the loan specifics. The document will, however, indicate the amount of the loan as it becomes a title record as to how much the loan is encumbering the property. Again, this deed of trust is recorded at the County Recorder to create the real estate security.
When you are reviewing a title report, the legal name of the current property owner is reflective of the last recorded grant deed for that property. A recorded deed of trust will show up in the list of title exceptions along with property taxes, easements, and other recorded documents.
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