Bank Foreclosed Auction- original grantor deceased and property transferred to children. Is it safe to buy this property at an auction?

6 Replies

Hi Folks,

I am studying a title where 

ABC Husband and XYZ wife signed a Deed of Trust to a Bank

After few years husband died, without writing any will.

They created affidavit of heirship for Children, and wife XYZ created Special warranty deed for their three Children and transferred the property.

Now property went in default and bank is foreclosing the deed of trust signed by ABC and XYZ.

So now the owners are the children, If I buy at foreclosure auction at county then what happens?

Thanks in advance,


Not a concern, unless the foreclosure action didn't name the "new owners" as additional defendants, assuming the transfer was prior to the foreclosure action.

John, Probate differs from jurisdiction to jurisdiction but,  sounds like you are purchasing the children interest in the property.  However, the question would be answered better by a Texas Title Attorney

Let me first say that I am not an attorney and don't live in Texas.

What the bank or local government that is auctioning the property may do is issue a Quitclaim deed.  This offers no warranty as to the status of the property title.  So you would need to initiate an action to "quiet the title" to remove any cloud on the title.  Suggest talking to a title attorney and the auctioning body.

A foreclosure is the forced sale of an asset in order to liquidated the security. No more, no less.

If sale is conducted and auctioneer cries the sale, you are purchasing the right, title and interest of the collateral pledged by the trustor. 

If the sale is valid, you have no issue with any heirs, beneficiaries or subordinated interests or claimants unless they litigate to unwind the sale, in which case a 'blown sale' might result in the trustee making a unilateral decision to rescind the sale or the claimants attempting to gave sale set aside. The latter is unlikely if you are a bonafide 3rd party buyer (BFP).