When would you use a Bargain and sale deed?
A bargain and sale deed is a form of real estate conveyance that transfers one person’s right, title and interest in a property to another. This document, also known as an estate by bargain and sale, is unlike most real estate deeds in that it doesn’t contain language guaranteeing or warranting the title. For help with a bargain and sale deed, contact MacGregor Abstract.
A bargain and sale deed is used when the grantor has only “equitable title” of the property but not “legal title.” The grantor may have equitable title due to a divorce settlement, for example. If a divorce decree awarded one spouse all ownership rights to a house but never legally transferred that ownership, the spouse would have equitable title but not legal title. In this case, using a bargain and sale deed would make sense because it doesn’t include any guarantee of ownership rights.
The downside to using this type of deed is that it makes no warranty about the status of the property’s title. A quitclaim deed is another way for a grantor to transfer his or her interest in property without providing any guarantee about the status of ownership.
The Bargain and Sale Deed is used to convey title to real estate when the grantor gives no express warranties. It is called a bargain and sale deed because the grantor “bargains” or promises that he or she possesses good title and has a right to convey it, but makes no warranties as to its quality.
This deed does not contain covenants for title, meaning that the grantor does not promise that he or she has good title or warrant against any other claims on the property. This type of deed is used primarily in situations where there is a previous recorded document that makes similar assurances, such as a mortgage, lien or security agreement. In this instance, the grantor would be delivering a Bargain and Sale Deed with Covenants for Title.
A bargain and sale deed is a type of deed where the grantor makes no warranties about the property’s condition, but does warrant that he or she is the owner and has the right to transfer title. The deed conveys whatever interest the grantor has in the property. You would use this kind of deed when you’re not sure what your rights are in the property or when you don’t have time to find out before transferring title. The grantee takes title “as is” and assumes all risk of loss, including any liens, judgments or encumbrances on the title.
A bargain and sale deed is sometimes called a quitclaim deed, although there is a subtle difference between these two documents. A bargain and sale deed transfers whatever interest a grantor has in a property, while a quitclaim deed transfers no interest at all. However, both deeds make no guarantee as to what interest they are transferring and thus are used only when you know exactly what is being conveyed and you’re certain that there are no defects in title.