Has anyone ever bought a property at a Sheriff’s sale? There is a rehab candidate that will be coming up at a Sheriff’s Sale at the court house but I have no idea how the process works. Are these ever a good deal? Thanks for your assistance.
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I haven't purchased real estate from a Sheriff sale..but have purchased regular stuff.
I'm guessing you're going to need to do all of your legwork BEFORE the sale. Get your financing lined up. Go through the property if they have an open house. Once the auction starts, you're going to have to be ready to go. They will probably want a good sized downpayment and/or proof of financing.
In cases where I only get one look through a property, I will take my digital camera and a couple friends along. Between the pics which I look at later, and the friend's observations, we can often spot trouble areas and get a fairly reasonable picture of the property.
Is it actually the sherriff selling the property? Some kind of drug seizure? Not a tax sale?
Sorry I couldn't give you more information.
You need to check with the l;aws in your sate; in some states the purchase is subject to a subsequent right of redemption by the mortgager/defaulting party.
As pointed out, you really have to do your homework.
The key to forgiving others is to quit focusing on what they did to you, and start focusing on what God did for you. Max Lucado
Sojourners: Christians for Justice and Peace
First of all these vary by state.
And there are lots of details that you will needed to know.
Is this a tax sale or foreclouser? Does title transfer immediately or does the owner have a right of redmemption and if so how long a period?
How much cash is needed at sale and how long do you have to pay off the total in CASH? If you have to get a load realize that you won't be able to get it on this property. You need CASH in almost all cases.
In many cases you will not be able to inspect the property except from the outside.
Will the property still be subject to other liens or will it wipe them all out?
Are there any easements/property line problems that would limit the use of the property?
Is the property now ocupied and if so how long will it take to get an eviction and how much work will be envolved in cleaning up afterwards.
Find someone local that knows about local laws and practices. Even if you have to pay an attorny $100-200, it will be cheap tuition.
around here you got to pay 100% by end of sale day, so have a bank credit note already set up.
I am not sure, but I think here that you can post 20% and have 5 days to finalize. And there might be some difference between tax sales and trust deed sales (foreclosures).
Bill:
Thanks for the response. There are ads published in the classified section of our local paper (I am near Chicago) once a week that is about a paragraph long lf legalese. Mostly they are mortgage companies that hire a collection agency to collect the debt. Not sure if this is a foreclosure or not but bidding takes place at the county courthouse. Ten percent down is due immediately and the balance in 24 hours. Maybe it is best to get some education from a lawyer. I was hoping someone had been through the process already.
In Ohio they advertise the property 3 times, one week apart. In that time frame, and any time up till the auction the owner can bring the property current and keep it.
Typically you can call the bank that has the note and ask for the forclosure department. You can ask them the balance due, 8 out of 10 times they will tell you although a few won't.
The amount due plus expenses is what the lender will bid for the property in order to get it back to resell it and try to recoup their money. Knowing this info will keep you from wasting your time if the person had say a 110% loan to value loan on the property or will let you know if it is a potential deal.
Another way to save money on a property you like is to contact the person being forclosed upon and ask what they owe on it. Sometimes you can convince them to tell you and simply offer to buy it for payoff and expenses so they don't have a forclosure on their record. The best deals in forclosures are really done this way.
All the rest of it is like a typical auction, you go and bid against others with the same idea in mind with the lender typically starting the bidding at the amount owed plus expenses. As long as it sells for above that they don't care. Terms vary state to state, here it is 10% down balance in 30 days.
Here you go look at the property with it locked up. Peek through the windows or whatever and if someone still lives there good luck. Most forclosure guys around here could double for a breaking and entering criminal lol. DanT
The amount due plus expenses is what the lender will bid for the property in order to get it back to resell it and try to recoup their money. Knowing this info will keep you from wasting your time if the person had say a 110% loan to value loan on the property or will let you know if it is a potential deal.
Typically true, but not always. Depends somewhat on how long the bank has been babysitting the property. As I had one banker tell me, "we're in the banking business, not real estate."
The longer a bank holds a property, the better the deal will get. they don't like paying taxes, lawncare, utilities, etc. They might sell it for a loss just to get it off their books.
But yes, typically DanT's forecast will come true. Early on they will try to get all of their $$ back.
jt8
Chuck, Illinois is a mortgage state....most stuff sold at sheriff's sales are mortgage foreclosures. There is a redemption period of 90 day from judgment or 7 months of service of the foreclosure complaint...whichever is later.
The only person that will be bidding on most of this stuff is the bank that holds the mortgage...because they don't have to put out any money to take the property. All the money bid goes to them!
There are five stages of foreclosure to but in according to Peter Conti and David Finkel in their book "MAKING BIG MONEY INVESTING IN FORECLOSURES". According to them, buying on the courthouse steps is the fifth (the worst) stage to buy.
In the early stages, the sellers will be swamped with investors making offers..you face competition, but get the best deals. After the sale, the time pressure valve is released and you have the opportunity to buy the redemption rights, or negotiate a "short sale" with the banks. Negotiating short sales is an art in itself but can be done if persistent. You should have a solid understanding of the entire process or the "loss mitigation officers" will blow you off....they're too busy with knowledgable investors to train a newbie! There are too many newbies that don't follow through with the purchase to get too excited about teaching them everything!
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I was hoping someone had been through the process already.
Been to a few, originated one where I held the mortgage. Foreclosure or unpaid taxes are the only reasons for a sale. Title is clear when you get it here, but that's something you absolutely need to know. Terms will vary locally, but always payment very soon. I've never seen an institutional lender bid. Private lender, yes, as I was prepared to do.
Around here, appreciation has made them very unusual. My borrower was an idiot who ended up losing her 60% equity.PAHS Designer/Builder- Bury it!