auction.com QC vs Special/Limited Warranty deeds

[Nick L.]

(Previously posted on a different forum but it fits better here)

I want to bid on a couple of properties on auction.com but without the expense of running title before bidding as I feel they may not meet the reserve. The preliminary title report provided by auction.com looks ok but obviously that's no substitute for running my own.

We all know QC deeds are toilet paper. In the fine print, I noticed the two major clauses in the link. If I'm reading them right, I can win the auction, order my own title insurance, and THEN either cancel the purchase in case of undisclosed defects or get a special/limited warranty deed from the seller. Sounds good, right? Am I missing anything?

Here are the clauses.

[Nick L.]

@Kevin Cox I figured out an answer, more or less. I ended up winning a very similar auction on a different site, also a post-foreclosure. The T&Cs were very similar - if you get your own title insurance you can have a Special Warranty Deed, otherwise you get a Quit Claim Deed. 

When it actually came down to the final contract they sent me after the auction, the only thing it promised me was a QCD. No mention of a SWD. My title company agreed to give me insurance as long as the chain of title showed the seller as owner. Other title companies are not so accommodating and may refuse insurance on a QCD.

Apparently it is common for banks not to record a Sheriff Deed from a foreclosure until they are ready to sell the property. As a buyer you have to take it on faith that the seller can and will get the SD recorded properly in time for your closing. There are nightmare scenarios where this gets held up for months or indefinitely, meanwhile you are out your earnest money and have no idea if or when you may get the property. 

Luckily in my case the SD was recorded a couple of days after I won the auction so I was ok to move forward. Otherwise I would not have signed the contract.