In Alabama, there is a 12 month period where anyone who had a title interest or any entity that had a lien on a property when it was foreclosed can redeem the title to the property through “Right of Redemption”. This does not have to be the person who had the mortgage, and these rights can be purchased by a third party so there is no real protection should someone want to acquire the rights and redeem the property.
If redeemed after the new purchaser has bought the property, the person who bought the property would have to move out and find another home.
If the person who bought the property paid more for it than the “Redemption Value” of the property, they would not be made whole for the difference between what they paid and the required amount to redeem the property through Right of Redemption.
The Surety Bond used to induce lenders to finance foreclosed property protects the lender but not the buyer against loss if the property is redeemed. The borrower must buy their own bond if they want to be financially protected.
Property that has been foreclosed often sits idle for many months prior to being placed on the market. To save money the lender usually turns off all systems and leaves them idle until a buyer has been found.
Plumbing and septic systems that have been left idle when first reactivated and inspected often appear to function properly only to fail when used under normal stress of an occupied home.
Heating and air conditioning systems when left idle often corrode internally in the heavy humidity of the South and will function for a short period and then fail once they are put back in full time service.
Homes left without the air conditioning system running often develop mold and other wood destroying fungus once the humidity is allowed to build up over time.
The risks associated with title and systems can often result in thousands of dollars either at risk for loss or at risk to be spent on costly repairs. When comparing a home that is lived in and not left idle, the few thousand dollars saved to buy a foreclosure is not worth the risk.