Certified Residential Appraiser Practice Exam

What is a characteristic of a bargain and sale deed?

1. Guarantees clear title

2. Used only in residential transactions

3. Does not guarantee clear title

4. Requires an appraisal

The correct answer is: Does not guarantee clear title

A bargain and sale deed is a type of deed that conveys real property but typically does not provide any guarantees regarding the title. This means that the grantor transfers their interest in the property to the grantee without any warranties, thus not guaranteeing that the title is clear or free from encumbrances. The absence of such guarantees means that the grantee assumes the risk of any title defects or liens that may exist, which is a key distinguishing feature of this type of deed. In contrast, a deed that guarantees a clear title would be a warranty deed, which offers protection to the grantee against any future claims to the property. Since a bargain and sale deed does not include such assurances, it is important for potential buyers to conduct thorough due diligence, including title searches, prior to completing the transaction. Other options can be clarified in context: a bargain and sale deed can be used in various types of transactions, not just residential ones; it does not require an appraisal, as the deed itself pertains to the transfer of property and does not impose appraisal requirements; and by its nature, it does not guarantee clear title, which is clearly the defining characteristic of this deed type.