Certificate of sale: A document issued to the winning bidder at a foreclosure sale.
Certificate of sale: A document issued by the court to the winning bidder at a foreclosure sale, which entitles the buyer to receive a deed once the court approves the purchase.
What A Certificate of Sale Really Stands For
Once a foreclosure auction has been completed and a winning bid has been entered, the successful bidder will usually be required to post a 5% non-refundable deposit to confirm the bid. The remainder of the bid as well as court registry fees is usually due by close of business on the following day, at which time the clerk will issue a certificate of sale.
The certificate of sale does not convey the title; it simply confirms that the buyer has been given the title as part of a transitional transaction. Oftentimes, the certificate of sale, also known as a tax lien sale certificate, is awarded after the buyer pays the property taxes that have accrued during the transitional period. A tax lien sale certificate allows homeowners to file for bankruptcy with the Internal Revenue Service, thereby halting the tax sale for the property.
In many states, the right of redemption allows banks to redeem a foreclosed property before filing the certificate of sale by paying the foreclosure sale price and any interest or fees. The certificate of sale is legally binding and includes documentation showing that all statutory requirements have been completed.
According to Fred W. Daily, a Florida tax law specialist, “You do not have to voluntarily move out of your home after the IRS has sold it—no matter what. The high bidder at an IRS auction of real estate receives only an IRS certificate of sale. (Internal Revenue Code §6335.) This certificate does not give the buyer the full rights of a deed holder. You still are the deed holder although your ownership right is now subject to the rights of the certificate of sale holder.
“If you are living in the home, the certificate of sale holder cannot enter it against your will or even ask you to leave. He must bring an eviction lawsuit in your local state court. An eviction usually takes time and money, and so you may be able to negotiate a voluntary move-out date or ask for moving expenses in return for vacating right away. You may even be able to rent back the home. Having this right to stay also gives you time to figure out whether you can possibly redeem the property.”