Insurers do not like sheriff sales because of all the possible defects that can make them invalid.

Much like a home inspection, they try to uncover defects (e.g. setbacks, fences, aforementioned well, etc.), minimize potential risk & use the info to inform the buyer.  

As in a defective process during the foreclosure, past heirs that pop up, etc.

However, if the failure to give the notice is coupled with fraud or failure to disclose defects, then other laws and penalties may (and likely will) arise pursuant to the Deceptive Trade Practices Act and/or the Statutory Fraud Act (see below).

The ones where you were forced into a corner or will have the upper hand in negotiation, just depending on the way you wrote your offer and navigate through the appropriate steps of the process.That's where I think a good broker's knowledge and experience will be the most helpful to you, when you have to navigate almost blindly through this maze at 10x your normal speed because of how competitive it is, when you feel you are stuck with 6k in earnest money in a house you didn't know some things about and your broker finds out for you that they have failed to disclose significant defects and he gets you out of it or when he helps you get a discount and a great deal or brings in his roofer in an hour and suggests you stay away!

Not wanting to spend $500 on title insurance for a $8000 we skipped the title insurance and got a written guarantee from the seller he would pay to correct any defects in the title of the lot.  

I had only one case (instance) with a non-disclosed issue like this (a 'hidden material defect') on an Institution owned property and we caught it (actually an inspector caught it) before we closed.

If the two places I mentioned show no serious defect, then I think you should hire a professional to abstract title for you to be safe.

The property could be re-sold at your expense – if this happens and the second sale sells for less, you could be liable for the difference plus the expense of the auction….Can you have possession immediately (you should get this, it will give you a head start on cleaning the property up and prepping for re-sale or rental.Will the auction company disclose any known defects (septic system failure, well failure, termites, water problems...etc.Ask for a copy of the auction contract and forms you will be required to sign and read every word......make sure you understand what you are committing to (many of those contracts have hidden clauses that will hurt you).Will the auction company accept your business or personal check (try to get pre-approved to use your checks (most auction companies require certified funds, if that is a requirement, get a certified check made out to you).Make sure you have good comparable sales data, you need to know what the value is and what you can sell it for immediately if you have to.

The power of sale is held by the trustee who does not know of the history of the property nor any defects the property may have either physical or legal (in title) outside of customary and ordinary sale means.