Insurance: As a developer of new construction, you will have construction defect liability for 10 years, meaning if there are construction defects that arise during the 10-year period you will need to fix them.

Further, if they decide the prior conveyance left a gap in coverage and may result in a defect in the chain of title, then they won't insure the next Purchaser either.

Not sure of TN laws, but in California, as a "professional seller" you are liable for any material defects or non-disclosure of important relationships for 10 years. 

Fixes are for defects. 

Price is really the only benefit, probably not the best place to start for a beginner because in a lot of instances you don't get to see the house beforehand so there could be any number of major defects, a lot of the auctions require you to pay in cash as well which can be difficult.

@Quadeer Porter given the hidden defects that the seller now knows of and has to disclose to future buyers I think you should be able to get most of it because they either have to fix those items or lower their price so the new owner can fix them, none of them are things that can be left as is until they break with the possible exception of the water heaters.

REOs have title problems all the time that can take longer to research, or even to correct a defect in the title. 

Defects, liens, encumbrances, adverse claims, or other matters(a) created, suffered, assumed, or agreed to by the Insured Claimant;(b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; Regarding OP's question about HOW this could have closed in April 2019... it's likely the good-through date of the title search was prior to the date of the recording of the equitable interest.

Sounds like either the vent fan is defective, never being used, or venting in to the attic. 

Real estate is definitely a market where information is freely available - you comped prices using Zillow, I comp rent prices using it as well.The discount you see on REO properties typically comes from their condition being less than desirable or the potential for major defects.