WHAT IS A SHERIFF’S SALE? All You Need to Know

What is a Sheriff's sale

Purchasing foreclosed property at a sheriff’s sale is an excellent strategy to save money on an investment property. There are various rules for this type of sale, and knowing them will help you make an informed – and possibly profitable – purchase.

What Is a Sheriff’s Sale?

A sheriff’s sale is a public auction in which confiscated property is auctioned by court order to compensate outstanding creditors. The auction earnings are intended to compensate mortgage lenders, banks, tax collectors, and other plaintiffs who have suffered financial losses as a result of the property.

In general, a foreclosure auction occurs when the property is sold directly by a bank or other lender that has seized the property for nonpayment, whereas a sheriff’s sale occurs as part of a court-ordered process to collect legal judgments against the previous owner of the property.

What Is the Process of a Sheriff Sale?

Sheriff Sales are normally held on the courthouse steps at regular intervals, either weekly or monthly and can also take place on the land itself or at a public, offsite venue. Because every county in the United States is different, it is critical that you contact your county clerk by visiting their website or calling them to acquire dates, times, and places.
Please keep in mind that while homes are not often sold in any specific order, prospective buyers should arrive early to prevent missing out on amazing deals.

What Are the Different Kinds of Properties Auctioned in a Sheriff’s Sale?

As previously stated, the homes auctioned at Sheriff’s Sales are residential foreclosures. Single-family homes and condos are examples of residential foreclosure properties. When a homeowner falls behind on his or her mortgage payments, the property might become a foreclosure. When this occurs, the properties enter the foreclosure process and can be set for auction. Foreclosure sales can be postponed or canceled at any time before the auction begins.

Where Does a Sheriff’s Sale Happen?

Sales are usually held at the sheriff’s office or the county courthouse. In some parts of the country, they are actually held on the courthouse’s front steps rather than inside.
The public is welcome to attend a sheriff’s sale. Lenders may attend or send a representative in an attempt to bid on their own property. This approach by the lender is legal. One thing to keep in mind is that everyone must have certified cash available before bidding on a property.

How to View a Property List

You may find a list of the properties that will be auctioned off in the next sheriff’s sale in a couple of places. Many sheriff’s departments have web pages where you can view forthcoming sales. You can also obtain a list of the properties that will be auctioned off by visiting your local sheriff’s office.

Properties for sale are frequently publicized in the local newspaper up to a month before the actual sale date. The sheriff’s office in your area can advise you which periodicals will print the notice.

A docket number, a sheriff’s department number, or a court case number is normally assigned to each property. It will name both the plaintiff and the defendant in the foreclosure action. It will contain the property address and description, as well as the debt amount or “upset price.”

What is an Upset Price?

The upset price is the bare least that the plaintiff (usually the lender) is willing to accept for the property. If no bids are received, the property will not be sold.
The upset price could be smaller or higher than the actual judgment amount, which is the amount of money the lender is owed to recoup its losses. The plaintiff’s attorney or another representative will frequently bid on the property in an attempt to raise the price.

Preparing for a Sheriff’s Sale

To be prepared for the sale, you should conduct a full coverage title search on all properties you believe you would be interested in if you plan to bid. Some jurisdictions enable you to make this search online, while others require you to conduct it at the main courthouse. You might also hire an attorney to handle this for you.

You should check to see whether there are any liens against the property at the state or federal level. This can include Internal Revenue Service tax liens, municipal taxes, and even water expenses. Another of the homeowner’s creditors may have lodged a judgment lien. You may be obligated to pay any of these liens that were not discharged through the foreclosure court procedures.

To find out if there are any open permits on the property, contact the town or municipality where it is located. If you buy it, you’ll have to spend money to close them out.

Closing of the Sheriff Sale and the Risks

Property purchased at a Sheriff Sale is sold “as is,” and it is the buyer’s responsibility to conduct their own due diligence on the properties they bid on. Buyers may choose to obtain title reports on properties they are interested in in order to determine whether the property has any title concerns that may survive the foreclosure sale. Finally, once the buyer has obtained the receipt of the sale, the buyer can get the deed to the property from the county.

Can You Stop a Sheriff’s Sale?

There are three possible ways to stop a sheriff’s sale:

  • Tax Sale Redemption
  • Bankruptcy
  • Short Sale

If the property was utilized as a residence within the last 90 days prior to the sale, homeowners can pay all outstanding taxes in order to receive their home back in a tax redemption sale. They are required to do so within 90 days of the sale. In addition, they must pay all taxes, interest, and charges.

Because homes rarely sell for more than a small percentage of their true worth at a sheriff’s sale, lenders will occasionally entertain a short sale if the purchasers can negotiate a successful arrangement. Lenders have the option to withdraw the house from the auction at any time and accept another offer.

Filing for bankruptcy effectively puts an end to all court collection operations, including a sheriff’s sale. It also buys time to investigate further possibilities rather than reacting to creditor demands. A Chapter 13 bankruptcy might also allow homeowners to remain in their houses during the procedure.

Keep in mind that the auction price may not be enough to cover the entire amount owed by the homeowner. In that instance, the lender may take additional action to recuperate its costs in the form of a deficiency judgment against the home’s owners.
The idea of a sheriff’s sale is terrifying. Regrettably, there are stringent deadlines. If you are facing a sheriff’s sale, please contact us as soon as possible to see how we may assist you before the deadlines.

What Can Homeowners Do to Stop a Sheriff’s Sale?

As a homeowner, you can take steps to try to avoid a sheriff’s sale and maintain your home. Depending on your circumstances as well as state and federal legislation, you could potentially:

  • Contest the foreclosure in court (check the foreclosure papers you received or consult with an attorney to find out the deadline to respond to the foreclosure action)
  • Apply for a loan modification or other form of loss mitigation (be sure to apply before any deadline under state law or federal law expires)
  • Renew the loan (again, don’t miss the deadlines imposed by state law or your mortgage contract).
  • File for bankruptcy or pay off the entire mortgage obligation.

Can a Sheriff Sale Be Reversed?

Most likely not. Once a home is sold at a mortgage foreclosure sale in Pennsylvania, the homeowner has no right of redemption. A sheriff sale can be reversed in very unusual circumstances if it was sold in a tax-debt sale.

What if No One Bids on a Sheriff Sale?

If a home does not sell during a Sheriff’s Sale, it becomes real-estate-owned (REO). The home is taken over by banks or other lenders until it can be sold or auctioned off.

Is It Possible to Get a Loan for a Sheriff’s Sale?

In theory, you can obtain a loan to purchase a home at a Sheriff’s sale. To buy a foreclosed home, you would typically need an FHA loan, but this loan would need to be granted at the time of the auction. If your home was foreclosed on, getting a loan to try to reclaim it at auction will be difficult to impossible.

Is a Sheriff Sale Open to the Public?

Sheriff Sales are, in fact, available to the public. They are usually held at county courthouses.

Who Makes Money From a Sheriff’s Sale?

The earnings from Sheriff’s Sales are distributed to mortgage lenders, tax collectors, and banks who were not paid by the previous owner. This is the solution for repaying lenders whose borrowers defaulted.

How Much Do Foreclosed Homes Auction For?

The price of a house during a Sheriff’s Sale is determined by a variety of criteria, including the appraised worth, market conditions, and the availability of potential buyers or investors. Foreclosed homes frequently sell for far less than their appraised worth at foreclosure auctions, providing an excellent opportunity to find a low-cost investment property.

What Happens Following the Sheriff’s Sale?

You may also have alternatives after the auction, depending on state legislation. You can repurchase the home and keep it if state law allows for a post-sale redemption period. Alternatively, state law may grant you the right to dwell in the home during the redemption term even if you do not redeem. However, if you do not leave when your legal right to occupy the home expires, you will most likely be evicted.

You may be able to oppose the sheriff’s sale in limited situations by filing a motion to set aside (nullify) the sale. A court may overturn the sale if you can demonstrate that there was a fraud, mistake, or irregularity in the sale’s behavior. For example, if the bank failed to send you due notice or the auction was not properly published in the newspaper as required, these deficiencies may be grounds for an objection to the sale.

Should You Think About a Sheriff’s Sale?

A sheriff’s sale may appear to be a great deal on the surface, but some elements might make the process complicated—and far more expensive than you anticipated.
Most auction homes must be acquired eye unseen, therefore there is some risk involved.

How to Locate Sheriff’s Sales in Your Area

Depending on where you live and which municipality is in charge of the sales, sheriff’s sales are organized and publicized differently. To find out about a sale near you, contact your local police enforcement office and inquire about the next sale date.
If you don’t find any properties that strike your interest for one month, keep looking.


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