A sheriff sale is a public auction at which property that has been defaulted on and repossessed, is sold by court order. The proceeds from the sale are used to pay mortgage lenders, banks, tax collectors, and other litigants who are owed money for the property.
Deal-seeking investors and homebuyers go to a sheriff sale to buy a foreclosure property at auction because, often, the purchaser can get a good value on such property. Sheriff auction homes are open to the public to bid on at auctions that are generally held in person on local courthouse steps. Foreclosure properties may also be sold by a third party like Auction.com at in-person auction events and online in some states like Florida and Ohio. Below you’ll find a breakdown of everything you need to know before bidding at a sheriff sale.
#1 How Does a Sheriff Sale Work?
Sheriff sales typically take place at regular intervals, either weekly or monthly, and are usually held on courthouse steps but can also take place on the property itself or at another public, offsite location. The laws pertaining to sheriff sales vary across US counties, so it is important that you contact your county clerk by visiting their website or giving them a call to obtain the right dates, times, and locations.
Please note that because properties are not typically sold in any particular order, it is advised that prospective buyers arrive early to avoid missing any great deals on properties.
#2 What Types of Properties Are Auctioned?
All types of foreclosure properties from residential single-family homes, townhouses or condos, multi-family homes, to sometimes even commercial spaces and mixed-use properties are sold at sheriff sales. The foreclosure process on a property begins when an owner or lienholder falls behind on the mortgage and after a period of non-payment, these properties are scheduled to be sold at auction. Foreclosure sales can be postponed or canceled at any time prior to the start of the auction.
#3 How to Prepare for a Sheriff Sale: Important Due Diligence
Foreclosure properties sold at auction are sold “as-is,” making it especially important for buyers to conduct their own due diligence to avoid any unwanted surprises. Due to tenancy laws, prospective buyers cannot enter the property to inspect it.
However, it is recommended that buyers inspect the exterior, from the curbside, without trespassing on the property. Buyers may also want to invest in full title reports to get a better idea of any existing liens on the property for which the buyer at the foreclosure sale would then become responsible.
#4 Paying for the Home at Auction
Many states require foreclosure properties sold at auction to be paid for in full on auction day. Payment forms can include cashier’s checks, money orders, and wire transfers. It is also recommended that buyers check auction day details to find out how to pay as laws differ by jurisdiction.
Properties can be bought only with guaranteed forms of payment, such as a cashier’s check. Buyers often bring their form of payment in incremental amounts to pay for their property on auction day with ease.
#5 Sheriff Sale Closing and Risks
Properties purchased at a sheriff sale are sold as-is and it is up to the buyer to conduct their own due diligence on the properties they bid on. Buyers may want to purchase title reports on properties they are interested in to find out if the property has any title issues that may survive the foreclosure sale. Lastly, once the buyer obtains the receipt of sale, the buyer can then obtain the property’s deed from the county.
To learn more about the foreclosure buying process and to start finding foreclosure sales near you, search on Auction.com today.
Your Sheriff Sale Recap
Properties sold at sheriff sales are foreclosures. These events are open to the public and are typically held on your courthouse steps. Properties are typically not sold in any particular order so arrive early to avoid missing any property sales.
Buying a foreclosure at a sheriff sale means that you could end up getting a good value on the property. However, it is up to you to conduct your own due diligence prior to the sale as these properties are sold as-is.
