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Foreclosures – A Bargain in Deed?

Types of Deeds

Or Was it a Special One?

Okay, I admit that this is probably not the best play on words, but if you’ve ever considered purchasing a bank owned property, you’ve no doubt heard about Bargain and Sale Deeds or Special Warranty Deeds, right?

What Is A Deed?

In simple terms, a deed is an instrument used to convey legal ownership of real property.  It is a document that describes the property being conveyed (sold or transferred), and who the parties (grantor/seller and grantee/buyer) are.

Aren’t All Deeds The Same?

Yes and No. As noted above, a deed is required to convey real property, but the type of deed determines what protections are involved. In general, when you buy a home from an individual in a typical purchase and sale transaction, you are conveyed title via a WARRANTY DEED.  When purchasing a home at auction or from a bank, this type of transaction offers less protection from liens and encumbrances and ownership is generally conveyed thru a BARGAIN and SALE DEED. Less typically, when two parties who once owned property together dissolve the partnership (divorce), one party may convey their ownership to the other via a QUIT CLAIM DEED.  For a quick description and explanation of the types of deeds used in WA state, click here.

Does It Matter What Kind Of Deed I Have?

In a perfect world, it wouldn’t matter.  In general, you probably wouldn’t ever notice the difference.  In rare instances though, the difference could be a legal and financial nightmare for the grantee of the deed. The bottom line is that you should be aware of the differences and understand what the legal ramifications are before proceeding.

Do you know what kind of deed you have on your home? If you purchased it from a bank, did you have any problems after the sale? Let us know…

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