A bargain and sale deed legally conveys a piece of property without any warrantees regarding title or other covenants.
If you are thinking about selling, purchasing or otherwise transferring a piece of land, a building or another form of real property, you may benefit from familiarizing yourself with some of the basic deeds involved in the process of transitioning ownership interests from one party to another. The two most common kinds of deeds used in these transactions are quitclaim deeds and warranty deeds. In a nutshell, quitclaim deeds are used when ownership interest is transferred even though no formal sale/purchase has taken place. By contrast, a warranty deed is used when ownership interest in a piece of real property is bought/sold for a price. However, these are not the only two kinds of deeds used in real property transactions. For example, when transactions occur in some specific states, a bargain and sale deed may be used when ownership interest is being transferred either with or without a sale. Most commonly, these deeds are used when ownership in residential real property is passing between family members, involves a trust or a purchase has been made through a foreclosure sale.
- Selling real estate in circumstances where you cannot guarantee a clean title
- Conveying real property through an estate.
A deed is the legal instrument that proves ownership in a piece of property. Deeds must be recorded in the public land records to create a ledger of past and present ownership. There are several types of deeds, and deciding which deed is appropriate for you to convey your property depends upon the facts and circumstances of the exchange.
A bargain and sale deed is used to convey a piece of property when the existing owner cannot make any guarantees to the new owner that the title is valid. Bona fide purchasers who pay for real property in good faith typically expect to receive good title, and for the most part that is the case. However, public records of property transactions sometimes span hundreds of years, and sometimes the chain of title for a piece of property is broken as a result of an error that occurred far in the past. The property title continues to be transferred from owner to owner without anyone knowing that each of these transfers is invalid because of past error. Because this is a risk to many real estate transactions, sellers may choose to convey property through a bargain and sale deed, which does not require them to swear that the chain of title was never broken.
If a holder of a bargain and sale deed discovers that the chain of title had been broken, and in fact she does not legally own the property she believed she had purchased, she typically has no legal right to a refund of the purchase price of the property. If you are involved in a real estate transaction where the seller is offering a bargain and sale deed, it is best to consult with a title insurance company and an attorney before completing the sale.
If you are looking to sell, purchase or otherwise transfer an ownership interest in a piece of residential real property, you may be able to use a bargain and sale deed as an efficient way of detailing that transition of ownership.
It is important to note that this particular legal tool is most commonly used in five specific states: Colorado, New York, Vermont, Washington and Wyoming. If you are not purchasing or transferring a property ownership interest in real property connected to those particular states, you may want to consult an experienced real estate attorney about acceptable legal alternatives that meet the aims of your particular circumstances and location.
Deed for Bargain and Sale