Buying directly at a legal foreclosure sale can be risky. Among the disadvantages:
- There is no financing. You need cash, and lots of it.
- The title needs to be checked before the purchase. If not, you risk assuming a seriously deficient title.
- It may not be possible to inspect the property’s interior before the sale, so you will have no idea of the property’s condition.
- Foreclosures are routinely purchased “as is,” which means you cannot go back to the seller for repairs.
- Estate and foreclosure sales are the only property sales that are exempt from some state disclosure laws. In both instances, the law protects the seller—usually the heir or financial institution—who has recently acquired the property through adverse circumstances, and may have little or no direct information about it.