{"id":26318,"date":"2023-08-21T06:02:00","date_gmt":"2023-08-21T06:02:00","guid":{"rendered":"https:\/\/businessyield.com\/?p=26318"},"modified":"2023-09-30T10:16:34","modified_gmt":"2023-09-30T10:16:34","slug":"bargain-and-sale-deed","status":"publish","type":"post","link":"https:\/\/businessyield.com\/real-estate\/bargain-and-sale-deed\/","title":{"rendered":"Bargain and Sale Deed: How it Works, Importance, Components & Drawbacks","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"\n

What is Bargain and Sale Deed <\/span><\/h2>\n\n\n\n

A bargain and sale deed is a legal instrument that allows the prior owner (the grantor) to transfer a property to the current owner (the grantee). This kind of deed is commonly used in real estate foreclosures and tax sales, whereas warranty deeds are frequently used in ordinary property transactions. But then, warranty deeds are preferred by commercial lenders because they guarantee that a property will be free of encumbrances such as title flaws, prior owner’s tax liens, and unknown easements from other properties. These assurances are not provided by bargain and sale deeds.<\/p>\n\n\n\n

Regardless, this post will show you what a bargain and sale deed is used for and all you should know about them. It also includes whether or not you should use them. <\/p>\n\n\n\n

Bargain and Sale Deed: Overview<\/h2>\n\n\n\n

Only the seller of a property holds the title and has the authority to transfer ownership, according to a bargain and sale deed. As earlier mentioned, this type of deed does not protect the buyer from liens or other claims on the land, therefore the buyer may be held liable if these difficulties arise.<\/p>\n\n\n\n

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But because the seller is likely to have little knowledge of the property’s history and status, bargain and sale deeds are commonly used when transferring property in foreclosure or tax sales, explains Eric Maribojoc<\/a>, Executive Director of George Mason University’s Center for Real Estate Entrepreneurship in Arlington, Virginia.<\/p>\n<\/blockquote>\n\n\n\n

According to Maribojoc, <\/p>\n\n\n\n

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“the vendor makes no guarantees with respect to any claims against the property or title flaws.” “The buyer on the other hand, accepts the property subject to any claims or title problems that may exist.”<\/p>\n<\/blockquote>\n\n\n\n

However, the seller may choose to indicate an encumbrance, such as the fact that there are no overdue property taxes, Maribojoc further explains. As a result, the deed is classified as a “bargain and sale deed with covenants” in this case.<\/p>\n\n\n\n

According to Andrew Maguire, a commercial real estate attorney at McCausland Keen & Buckman in Devon, Pennsylvania, bargain and sale deeds are legal in certain jurisdictions including Nevada, New Jersey, New York, Oregon, Rhode Island, and Washington.<\/p>\n\n\n\n

\u201cMost buyers of real estate in these states will demand a bargain and sale deed with covenants,\u201d says Maguire, which means \u201cthe seller of the property states that it has done nothing to encumber the title to the property being conveyed, except for those encumbrances that are specifically referenced within the deed.\u201d<\/p>\n\n\n\n

It’s critical to understand what or who the covenants protect in a bargain and sale deal with. This raises the question, “how does a Bargain and sale deed work?”<\/p>\n\n\n\n

How Does a Bargain and Sale Deed Work?<\/h2>\n\n\n\n

A bargain and sale deed form comprise a number of important details.<\/p>\n\n\n\n