Grant Deed vs. Gift Deed: What’s the Difference?

A Grant Deed transfers property with certain guarantees, while a Gift Deed transfers property as a gift with no payment involved. Both are legal conveyance documents, but they serve different purposes and offer different protections for buyers and recipients.

What Is a Grant Deed?

A Grant Deed is a real estate deed where the owner guarantees they have not transferred the property to someone else and that there are no undisclosed encumbrances. Grant deeds are commonly used in standard real estate sales.

Key features of a Grant Deed:

  • Used in real estate sales involving payment.
  • Includes limited warranties of title.
  • Grantor promises no previous transfer to others.
  • Indicates the property is free of undisclosed liens.

Learn more: What Is a Grant Deed?

What Is a Gift Deed?

A Gift Deed transfers property from one person to another without any consideration (payment). It is often used between family members or for charitable purposes.

Key features of a Gift Deed:

  • Used for transfers with no money exchanged.
  • No warranties beyond ownership unless added.
  • Must show donor intent and recipient acceptance.
  • May involve gift tax filings depending on value.

Learn more: What Is a Gift Deed?

Grant Deed vs. Gift Deed: Key Differences

  • Payment: Grant deeds involve a sale; gift deeds do not.
  • Warranties: Grant deeds include limited title guarantees; gift deeds typically do not.
  • Intent: Grant deeds reflect a purchase; gift deeds reflect voluntary, no-payment transfer.
  • Tax Effects: Gift deeds may trigger gift tax reporting; grant deeds generally do not.
  • Use Cases: Grant deeds for ordinary sales; gift deeds for family/estate transfers.

Why This Matters for FSBO Sellers

FSBO sellers may encounter both types of deeds depending on their situation. Using the wrong deed can delay closing or cause legal issues.

  • Grant Deed is appropriate for standard sales on the MLS.
  • Gift Deed is appropriate only for family transfers or non-sale conveyances.
  • Sellers must ensure the deed type matches the transaction intent.
  • Title companies rely on the correct deed type to issue clear title.

Frequently Asked Questions

Can a Gift Deed include warranties?
Yes, but only if the donor chooses to include them. Most gift deeds include none.

Can you convert a Gift Deed to a Grant Deed?
No. You must execute and record a new deed.

Which deed is better for family transfers?
Gift deeds are typically preferred for no-payment transfers between relatives.

Which deed provides more buyer protection?
A grant deed, because it includes limited title warranties.