Industry News

Inside the legal world of foreclosure auctions

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Editor's note: With foreclosures on the rise in many parts of the country, Inman News examines the legal risks of investing in foreclosed properties at auction, describing the most common legal problems that arise and explaining how two investors had to fight in court to keep the property they purchased at auction after the former owner raised legal challenges. (See Part 2 and Part 3.) Smart real estate investors are no doubt putting two and two together. Real estate markets have cooled. In addition, foreclosures were up 33 percent in April from just 12 months before, as Inman News has reported. Investors may add up those two facts and conclude that buying property at a foreclosure auction is the next smart move in real estate investing. That may be true, but only for exceptionally careful investors who know the legal risks of buying property at a foreclosure sale -- and there are many. Just ask me. I ran into several big ones when a friend and I bought a condo at a foreclosure a...