After purchase of a property at Auction


#1

Sean,
I recently bought a home at an auction. i go talk to the homowner two days after the sale, so needless to say i do not have the grant deed yet. the old owner knew he was in the foreclosure process but it was news to him that the home had sold. very nice guy, but says that he talked to the lender the week prior to the auction date and they told him it was postponed. so it was a shock to him when i told him we bought his house earlier that week.
?My question is this: we dont have the grant deed yet, and he no doubt is calling trying to get things figured out, and try and stop the sale. can he do this? or am i pretty safe?
?Another question is this: he said that his lawyer friend called the lender (before the auction date) and they also told him that it was posponed to a later date. could he tie this all up in a lawsuit against the lender and stay in the home for quite some time?
?Do you have any thoughts or ideas for me?
?Thanks,
?Brent


#2

I’d call the trustee and ask when the deed will be sent out. Should give you a quick indication of whether or not they are contemplating not sending it.
?
Generally I don’t recommend contacting the owner until you have the deed. I have had trustees get cold feet and tell me they were sending the check back. I usually fight this. In one case they decided my case was better than the homeowners and they sent me the deed, in another they offered to pay me interest on the money for the time they had it, and in a third case they told me too bad (in that case they claimed to have clearly documented proof of a mistake in the sale and that they were confident a court would uphold overturning the sale if I were to fight it).
?
Also remember that even if they send the deed the homeowner can still sue. This is worst then having the trustee return the check. So if I believe a homeowner story like this, I usually bring the homeowners claims to the trustee and let the trustee know that I’ll be seeking damages if the homeowners claims are true and their lack of care gets me caught up in a lawsuit. Usually the trustee will send you your check back unless they are very confident they have a good sale and they are willing to defend it in court. I have had a homeowner sue after I got the deed anyway. Not that big a deal. The lenders attorneys will take the lead. You still need to file an answer and go through some hoops, but the lenders have great attorneys and it’s unlikely to result in more than a delay and a few thousand in legal fees for you to get the suit cleaned up.
?
Hopefully I’m not panicking you. These are pretty rare cases. I’d bet a nice bottle of wine the owner is just scapegoating, you’ll get the deed and the owner will ultimately move without incident.


#3

Sean,
?
? you were right, got the grant deed, and the homeowner is being very cooperative. thanks for the response!