What is the difference between a Grant Deed and a Deed of Trust?
A Grant Deed transfers title ownership of real property from the current owner to the new owner. A deed can also relinquish a co-owner’s interest in real property to another existing co-owner. When a person or entity purchases real property, a Grant Deed is recorded showing them as the new owner of the property.
A grant deed requires:
- The grantor’s signature, which must also be acknowledged with a California all-purpose acknowledgment
- A certificate of acknowledgment endorsed on the deed (CIV 1188)
- Grant deeds submitted for recording must be accompanied by a completed Preliminary Change of Ownership Report
On the other hand, a Deed of Trust reflects loans against real property. In this regard, rather than addressing “title” to the property, a Deed of Trust addresses lien hold interests in real property. A Deed of Trust is recorded to secure repayment of a debt between a bank lien holder (lender) and the actual titleholder/owner of the property.
The recorded deed of trust has priority over other recorded deeds of trust on the same property based on when they were recorded. For example, a deed of trust recorded January 1, 2017 would have priority over a later deed of trust recorded March 3, 2017. When a bank loans money to a buyer money to buy a home, the homeowner signs a deed of trust. This Deed of Trust is then recorded on the property to memorialize the loan and secure the loan.