Legal Question in Real Estate Law in Maryland
In 2007, I purchased my home. Before I purchased the home, I had put a contract on the property which I was told by the owner was heading toward foreclosure. A short time later, my realtor told me that the property had foreclosed and was purchased by a developer. However, the developer was willing to sell it to me at the same price I was going to buy it from the homeowner. I decided to go ahead with purchasing it from the developer. My question is, if I already had a contract on the property and was told that it was not in foreclosure yet, was it illegal that the developer was able to purchase property right under me? If the house went into foreclosure while I had a contract on it, shouldn't I have been informed and allowed the opportunity to purchase the property as a foreclosure myself?
2 Answers from Attorneys
A foreclosure auction is open to the public, advertised in the paper and generally held on the courthouse steps. Only people present with the required deposit amount can bid. The lender controls the process, not the homeowner seller. A homeowner has no control over the foreclosure auction or bids and cannot interject another person's bid or offer, even if s/he had lined up a buyer already. It is possible that a buyer in your situation might have a breach of contract claim against the seller but this does not help get the property after it has been sold. Also, a buyer would need to press any claims within the time required by the statute of limitations. Buyers are wise to monitor the paper and/or court docket if they know or suspect a property might be headed to auction.
The seller maintained a right of redemption up to the point of conveyance through the foreclosure. Then you state that another buyer with whom you were in contract bought out the property and made the same property available for your purchase at the same price. There are no damages since the property is available at the same price to you. There may be underlying mortgages and other liens at issue that affect the property. Are you sure you want this property? If so, contact me and send your contract for review.
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