A sheriff’s sale is a public auction where investors can bid on foreclosed properties. Owned by the bank, the properties are sold at a sheriff’s sale to recoup the outstanding balance of the mortgage loan. Sheriff’s sale are held locally in individual counties within a state.
Types of Properties Auctioned
At a sheriff’s sale, the properties auctioned off are foreclosures. These can include single family homes, multi-family homes, mixed use properties, larger complexes, commercial buildings and agricultural properties.
Sheriff’s Sale Location
Sheriff’s sales take place often, usually once a week or once a month in the sheriff’s office at county courthouses across the United States. In some regions, the sale will be held on the steps of the courthouse rather than inside.
Bidding on Properties
Sheriff’s sales are open to everyone, as well as the bank, which can buy back the property. Bidders should have certified funds on hand to bid on the property.
Viewing the Properties
Properties up for auction can be viewed in the following locations:
- Online, through the sheriff’s office website
- In a local newspaper, usually a month before the sale
- At the sheriff’s office
Foreclosure property listings will usually include the following information:
- Docket#/ Sheriff#/ Court Case #
- Property Address:
- Upset Price
The Upset Price
At a sheriff’s sale, the upset price is the minimum sales price that will be accepted. If bids fail to meet this price, the property will remain with the bank. The upset price can be less or more than the judgment amount, however, the bank will usually bid on the property to drive the price up.
Before a Sheriff’s Sale
Prior to attending a sheriff’s sale, investors should do a full title search on the property, which can either be completed online or at the courthouse in order to check if there are any federal, state or IRS liens against the property. Liens can include back taxes or water charges. Investors may be on the hook for these charges if they were not canceled by the judgement. Bidders should also find out if there are any open permits on the property, which should be closed out.
Come with Cash
Bidders should attend an auction with the amount stipulated in the notice of sale, which can range from 20 to 30% of the total price. The initial down payment can be paid in cash, by certified check or money order.
Closing on the Property
Depending on the rules of the sheriff’s sale, successful bidders will usually have 30 days to close on a property. It is best to check the requirements of the sheriff’s sale prior to the auction.