Certified Residential Appraiser Practice Exam

Which deed is primarily used to transfer property held by a fiduciary?

1. Tax deed

2. Warranty deed

3. Bargain and sale deed

4. Deed of trust

The correct answer is: Bargain and sale deed

The deed mainly utilized to transfer property held by a fiduciary is the bargain and sale deed. This type of deed conveys the property from the fiduciary to another party with the implication that the fiduciary has title to the property, but it does not provide the same level of guarantee or warranty regarding the title as a warranty deed does. Bargain and sale deeds are often used in transactions involving estates, trusts, or other fiduciary roles because they provide a straightforward transfer without the complexities involved in guaranteeing a clear title. In a fiduciary situation, the person managing the property has a duty to act in the best interest of the beneficiary, and the bargain and sale deed aligns with the nature of such transactions, focusing on the transfer of interest rather than warranty. Other types of deeds, such as a warranty deed, offer more robust guarantees about the title but are not typically used in fiduciary transactions as they suggest that the seller warrants the title against all claims. A tax deed is used in the context of property sold for delinquent taxes and does not pertain specifically to fiduciary transfers. A deed of trust is a security instrument that does not transfer property ownership in the same sense, as it involves a lender and borrower scenario rather than a straightforward