September 30, 2022

How Grant Bargain & Sale Deeds Work

A grant, bargain & sales deed is a special-warranty deed that shows or affirms that the
grantor or property owner has the right to legally transfer the title on the property to the
grantee/new owner. This deed offers a warranty of title that’s limited to the time the
grantor occupied/held the property.

Before buying a real estate property, mainly through tax sales and real estate
foreclosures, it’s crucial first to understand how the various types of deeds work and
their impact on both the grantors’ and the grantees’ legal rights. We have covered this
and more in the sections below.

Understanding Grant, Bargain & Sale Deeds

In most states, grant deeds and bargain & sale deeds appear separately. However, in
some like Nevada, a grant, bargain & sale deed is treated as a special-warranty deed
recognized under the state’s revised statutes. Unlike the other deeds, the grant, bargain
& sale deeds specify and distribute the risks between the new and current owners.

In other words, the grantor bears any risk of property defects that transpired while they
held the title. A grantee can, therefore, sue the grantor for violating the warranty to
recoup losses. By accepting the deed, the grantee/new owner assumes any risk of
property defects.

The party bearing the property/title risks can mitigate their exposure by signing up for
title insurance coverage. Most title insurance companies accept one premium
payment/lump sum at closing (often paid by the seller) and promise to cover legal fees
or financial losses due to unknown title issues.

Uses of Grant, Bargain & Sale Deeds

Grant, bargain & sales deeds are common when transferring ownership of purchased
real estate properties. Multi-family homes, commercial properties, and unimproved land
can be transferred using this special-warranty deed. With the dead’s special covenant,
the buyer avoids the risks of title defects while the seller minimizes exposure to
unforeseen risks outside their control.

A lender financing the property often insists on a comprehensive. Similarly, the lender
will require a title insurance cover and examination before funding the property. Most
lending institutions only consider a grant, bargain & sale deed if the insurance policy
covers their lending risks and the title examination shows a clear title.

Tips for Creating Grant, Bargain & Sale Deeds

A grant, bargain & sale deed typically have two major covenants. One is that the current
property owner has not transferred the real estate property; hence, they are the rightful
owners of the title. The second covenant is that the real estate/ property’s title is without
defects at the time of transfer.

Still, the deed can specify the extent of the implied covenants. And unless it explicitly
seeks to transfer a lesser interest, it will always convey the grantor’s entire interest in
the property. Some of the critical pieces of information to be captured on the deed

● The grantor and grantee’s names.
● The grantee’s address and address for tax statements.
● A detailed description of the property and its parcel number.

Every state has its own formatting requirements when creating a grant, bargain & sale
deed. These requirements specify how to format the front page and margins and the
quality/type of paper to use.

Get Started Today

Grant, bargain & sales deed are critical legal documents that must be keenly prepared
to ensure a smooth transfer of real estate property from the current title owner to the
buyer. A poorly written deed can lead to failed conveyance, liability risks, and future title

If you need help creating a grant, bargain & sale deed for your real estate transaction,
our Element Title and Escrow team is ready to help. Contact us today; we’d love to
guide you through the title transfer process, one step at a time.

September 30, 2022