I have 1 month deposit so it will cover that.

It serves to create a defined contract to point to if there are questions, you learn how the leases function, it's easier to collect deposits, if you sell your house to another investor you can show it's been rented out. 

Through a lot of documentation, I also called out the title company for never providing me a earnest money receipted check or wire transfer - I simply got a letterhead saying the money had been deposited.

Some lower income tenants tend to pay via cash or money orders and you could have them deposit it direct into your account and text you the receipt for you to input.

You will want to sign a short term lease agreement and get proper deposits for them such as last month and security.

The damages exceed their security deposit.

One of the "devilish" investors I once worked with actually devised 2-step bidding strategy involving 1st win by OO, then deliberate release BOM with loss of escrow deposit, at which time it would fall right into the lap of the investor who would submit a bid the NIGHT BEFORE status in MLS changes to BOM.

Depending on the auction terms it could be that result plus the forfeiture of your deposit, or perhaps the trustee/auction company must elect one remedy vs. the other.

What was the amount of earnest money deposit?

pays $112 deposit)From what I understand, as the new owner of the property, I'm pretty much on the hook for non-payment of the water bill no matter which form I submit.