A land purchase agreement is a legally binding document in real estate between the purchaser and the original owner of the land. In some cases, the seller will provide financing to the buyer for a mutually agreed upon price so that the buyer can later repay the loan in installments. The main characteristics that separates one land purchase agreement from another are the stipulations of the payment plan set forth in the deed and whether or not there are any covenants and guarantees to the seller regarding the property.
Warranty deeds are known for providing the buyer with the most protection in comparison to other purchase agreements because they furnishe the buyer with three warranties: a covenant of seisin, a covenant against encumbrances and a covenant of quiet enjoyment. The covenant of seisin proves that the seller truly owns the property and therefore has the right to sell it. The covenant against encumbrances assures the buyer that the property is free of any debts, liens or mortgages incurred by the original seller. The covenant of quiet enjoyment infers that the seller must defend the title given to the buyer should a third party crop up subsequent to the sale.
Grant deeds are generally only used in certain states, such as California, for an immediate transfer of land or property from a seller to a buyer. This deed asserts that the grantor of the property is giving an interest in or title to said property to the grantee. The deed also furnishes two guarantees: that the grantor owns the property without encumbrances and that no one else has a right to claim the property.
Bargain and Sale Deeds
Bargain and sale deeds provide few guarantees to the buyer of the property. This type of purchase agreement is very basic and does not include any of the three covenants of a warranty deed, which also means the seller is not responsible for defending the title that the buyer is purchasing.