Everything the Banks don’t want you to know
What are Sheriff’s Sales? Learn about The Sheriff Sale Process
A sheriff’s sale is a sale of property held at the sheriff’s office (or other disclosed location) to sell property seized for lack of payment of property taxes or a lawsuit was filed by another lien holder.
Buying A House At A Sheriff’s Sale
The rules for bidding and purchasing property at the sheriff’s sale can be obtained from the local office handling the sale. These sales are usually held weekly or monthly, depending on how many properties they have, and are usually publicly announced prior to the sale.
Sheriff’s Sales are always held at an open auction. The sales are held auction style with oral bidding. The attorney for the plaintiff will start the bidding off. The bidding continues until the highest bid is reached, and the highest bidder is, as usual, the winning bidder. The Plaintiff’s attorney normally won’t allow the bidding to go for less than the Judgment amount due his client. He will bid until he has reached his upset price, or the lowest price he will accept for the property. This upset price includes the total of the Judgment due, interest, attorney’s costs, Sheriff’s fees, advertising costs and commissions. Once the attorney has reached his upset price he may stop bidding and the highest bidder will be the successful bidder.
Some sheriff’s sales require that you be able to put a payment down on your winning bid, something like 10% with the remaining due in a certain period of time (usually 30 days). It is usually easier to obtain the financing once you’ve secured the property. Some sheriff’s sales require that you be able to pay for the property upon winning the bid. This doesn’t mean a promise or a letter of pre-approval or commitment from a lender. This means you need to be able to write a check for your purchase the day you make the purchase.
Thing To Remember When Buying A House At A Sheriff Auction
One thing that makes people a little nervous about purchasing property via a sheriff’s sale is that they are handle “buyer beware”. The rules of caveat emptor apply here. This means you will not be able to tour the properties for sale at the sheriff’s sale prior to purchasing them. You can do a drive by look, but that’s usually the best idea you will get about what you are purchasing. You need to be aware that what you get is what you paid for. Period. You can look at the history of the home through the files at the recorder’s office or Clerk of Court’s office. Delinquent taxes usually get paid out of the proceeds of the sale.
At the very least you should know the area you are purchasing homes in because you can then decide if you are getting a deal or not. As with any real estate foreclosure dealings, your homework being done to the best of your ability is what will keep you out of trouble when purchasing these properties.
As with any auction, the purchaser is liable for the payment of the purchase money whether or not he attends the sale and is there to obtain his deed. In cases where the purchaser is not present, and he neglects to obtain his deed and pay the balance, the Sheriff will have the option to re-advertise the property and sell it again, or to go after the purchaser and make him pay his debt. If the property goes up for re-sale, and it sells for a lesser sum, the original purchaser could be liable for breach of contract on the original sale price and have to pay the additional amount.
As with any type of property auction or foreclosure proceeding, you are always strongly urged, if you are not at all familiar with Sheriff’s Sale Procedures, to seek legal advice. Your attorney can have a Title Search run on the property before they bid for you. The search will reveal if there are any outstanding liens that you would have to assume if you become the highest bidder.
So, be careful when dealing with Sheriff’s Sales. They are all handled very legally and with a set of rules and procedures that are the same for everyone involved. But if you don’t know what you’re doing you can lose your shirt. It’s best to hire an expert attorney knowledgeable in these types of sales who can guide you along the way.