Most states have a variety of deed forms for different situations. A bargain and sale deed is sometimes used when the seller does not want to guarantee that the title is free from defects, but it can also be used in other circumstances.  For help with a bargain and sale deed, contact MacGregor Abstract.

When would you use a Bargain and sale deed?

You are selling the property but provide no guarantee that the title is free from defects. A bargain and sale deed will transfer whatever rights you have to the buyer. The buyer takes on all risk for any problems with the title. In some cases, this is acceptable because the buyer wants to research the title history themselves or needs to do work on the house before turning it around and reselling it. In other cases, sellers choose this type of deed because they don’t know whether there are any problems with their title. They may not have owned the house long enough to discover all potential issues with it, they may have inherited it and never checked on its status, or they may have bought it without checking out the title history.

You are transferring property as a gift to another person. The bargain and sale deed allows you to transfer property without paying tax on it, which is why many people choose this form when they are giving away real estate rather than selling it at market value.

Bargain and sale deeds are really an alternative to quitclaim deeds.

A bargain and sale deed conveys a seller’s interest in a property to a buyer, but it does not make any warranties or representations about the title or any other ownership rights in the property. It is generally used when the seller knows of no defects in the title to the property, but does not want to make those warranties.

In many states, the bargain and sale deed includes a covenant that the seller has not already conveyed the property to someone else. If you have any questions about whether you should use a bargain and sale deed rather than a warranty deed, you should consult with an attorney.

A Bargain and sale deed is a real estate deed in which the seller guarantees that he or she possesses legal title, but makes no promises as to the quality of that title. The grantee’s rights are subject to any other interests in the property; hence, the grantee should have a title search done before accepting this deed.

Bargain and sale deeds may be used when a buyer wishes to acquire property for relatively low price, without warranties about its title or associated liens. For example:

When purchasing property from an estate that has gone through probate, prior liens may not have been discovered during the probate process.

When acquiring property at an auction, there may be unpaid liens attached to the property that a seller is unaware of.

When buying property from a homeowner who has no knowledge that his land is subject to a lien due to an unpaid contractor who constructed an addition on the home.

James Montano