Understanding the Brevard County Foreclosure Auction

Posted: March 30th, 2023

Great Opportunities in Brevard County Real Estate

In Florida, mortgages and other liens (mechanic’s/contractor’s liens and also condominium and homeowners association liens for unpaid dues) are foreclosed through a judicial process in which the property is eventually sold at auction to the highest bidder. 

There has been less volume in the past several years due to the bull market in real estate, particularly residential. 

There can be great opportunities to find properties selling at a discount at the foreclosure auction, but there can also be tremendous risks. 

The Risks of Buying Foreclosures at Auction

The properties are sold without any warranties as to the condition of the property, the condition of title, the absence of any other liens on the property, or that the plaintiff has brought all appropriate defendant parties into the case.

There is no title insurance given at the foreclosure auction. 

A party with an interest in the property must be named as a defendant and properly served, or the foreclosure case will not affect their interest in the property, as to do otherwise would violate the party’s due process rights to their property interest.

Oftentimes there are defects in some of the foreclosure cases which go to auction. 

Brevard County was among many ‘ground zero’ communities in the housing crash associated with ‘The Great Recession’. 

Many of the plethora of foreclosure cases that came through the Brevard County court system were handled by the big ‘foreclosure mill’ law firms at the center of the ‘robo-signing’ scandal.

If a pre-existing defect in title is present, it can often be cured during the foreclosure process if properly prosecuted by the plaintiff’s attorney. If not cured within the foreclosure, or if the foreclosure case is improperly prosecuted, any pre-existing defects in title, or defects erroneously created by a faulty foreclosure process (missing a defendant or junior lien, for example) must be cured before the purchaser can sell (‘flip) the property to another buyer, or to get a mortgage to get the investor’s cash back out of the property. 

Attending the Foreclosure Auction

In this video, made several years ago, when I had more hair on top of my head, I attended the foreclosure auction in Brevard County, Florida. 

The Brevard County Clerk of Courts still conducts a live, non-computerized, in-person, human-run auction most Wednesday mornings at 11 a.m. 

I spent many Tuesday evenings reviewing title searches for investor clients who were seeking to buy at the auction. 

Sometimes I had to consult counsel with our underwriters for their opinions on how to treat a matter in the chain of title or a potential defect in the foreclosure case. 

I would give them guidance on which properties looked ‘clean’ and which ones to avoid. When they sold the property, they would have my office handle the closing. 

With the increasing scarcity of available residential housing in Florida and the improved economic conditions generally, the volume of foreclosure cases has since dwindled, and the demand for property has made the foreclosure auction less attractive to many experienced investors because there are many ‘amateurs’ who (in their opinion) overbid for the few properties that are coming to auction.

Why You Should Attend a Foreclosure Auction

I encourage any aspiring real estate investor and anyone new to the real estate business to attend a live auction. 

No doubt in time the computers will make the live auction ‘obsolete’ or ‘impractical’ but as of today you can still experience the thrill of watching the bidders compete in person.