Bargain and Sale Deed
If you have purchased real property, you are aware that the transfer of title was done through a deed. There are many deeds that are used. Land may be transferred from one owner to another by the use of a bargain and sale deed without covenants or warranties against the acts of the grantor. If you receive a bargain and sale deed, you are buying land without knowing if there are any encumbrances on it, unless stated in the deed. The grantor only guarantees that the grantor has title, and does not guarantee that the title is free of defects.
Bargain and sale deeds contain the following provisions:
- Date the property was sold
- Buyer’s and seller’s names
- Amount paid for the property
- Type of estate granted
- Legal description
- Generally, the bargain and sale deed are conveyed with the words that “grantor grants and releases or grants, bargains, and sells”.
When are Bargain and Sale Deeds Used?
A bargain and sale deed can convey with covenants and other warranties as long as they are specifically stated in the deed. A bargain and sale deed with covenants guarantees the buyer that the property is free and clear of indebtedness.
Bargain and sale deeds without covenants are used for conveying real property that is purchased at a sheriff’s foreclosure auction sale or a tax sale or by fiduciaries such as executors. The grantor is generally a bank, tax or government authority or executor who did not occupy the land and does not know of any encumbrances.
States that Use Bargain and Sale Deeds
Sometimes bargain and sale deeds are used in New York, Washington, Wyoming, Colorado and Vermont when transferring residential property. The preferred type of deed is a general warranty deed because it gives the buyer the most protections.
Help from an Estate Planning Attorney
You should seek the legal advice of an estate planning attorney when you are buying or transferring real estate. Estate tax laws are complex and an estate planning attorney can answer any questions that you may have.