What is a Bargain and Sale Deed?

Mary McMahon
Mary McMahon

A bargain and sale deed is a legal document releasing interest in the title to a property to a buyer without guaranteeing the validity of the title. This means there may be defects with the title that the buyer could uncover later, and these could potentially pose a problem, such as making it difficult to resell the property. This type of deed is most commonly used for real estate, although it can also apply to other types of property.

A bargain and sale deed is most commonly used for real estate.
A bargain and sale deed is most commonly used for real estate.

The context where people are most likely to encounter a bargain and sale deed is in government sales and foreclosures. When the government decides to sell property it owns or sells property it has seized, it makes such sales with no guarantees on the title to the property. The government releases its own interest, but there may be another interest in the property, as someone could discover by having a title search run to learn more about it. In cases where the government knows of defects on the title and sells property with a bargain and sale deed, there is a possibility of filing suit, as the government is liable for not disclosing this information.

Similar situations can be seen with foreclosures. When foreclosed property is sold, a lender releases interest in the property with a bargain and sale deed. The property may have also been used to secure other loans, though, and there is a possibility that someone else or another bank has an interest in the property. This can be especially common with properties involved in refinancing transactions where the previous lien was not released.

Buying property with this type of deed is not necessarily a bad idea, but it is advisable to take some precautions. If possible, a title search should be conducted to look for any clouds on the title and to see how difficult it would be to release them. The seller will not take responsibility for addressing other interests in the property, making it important for buyers to do their research ahead of time. The property should also be thoroughly inspected like any real estate purchase for physical problems, and it can be advisable to confirm the boundaries of the property with a surveyor.

In cases where property with a bargain and sale deed is purchased and defects with the title are uncovered after the fact, it is not possible to get a refund from the seller. If the seller knew about these defects and didn't discuss them, this may be grounds for a suit, depending on the law and the circumstances of the sale.

Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a wiseGEEK researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

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