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Intro
Understanding a Sheriff Sale is essential, especially if you're in real estate. Sheriff Sales presents a unique opportunity to purchase a home, as they have different legal and homeowner rights and a bidding aspect.
Understanding a Sheriff's Sale
What is a Sheriff Sale?
A Sheriff's Sale is a public auction where a court order sells repossessed property to settle outstanding debts owed to creditors.
- Investopedia
Types of Properties Auctions
All types of properties are auctioned in a Sheriff's Sale, including Commercial, Condo, Multifamily, and single-family homes. Properties are brought to a Sheriff's Sale when they are foreclosed upon. A property is foreclosed upon when the homeowner doesn't make mortgage payments and defaults on their loan.
Preparation for a Sheriff Sale
When preparing for a Sheriff's Sale, we recommend not just obtaining the necessary documents but also doing your due diligence on the property in question. This means checking property conditions, where the mortgage is currently at, and conducting title research.
You can contact your local realtor for this portion of the process, as they may have much-needed information. To do this, Head to Google and type in "Realtor in {Your City}" for example, "Realtor in Monroe WI" or "Realtor in Lodi WI"
You can also search "{Your City} Real Estate Agent," for example, "Ashland Real Estate Agent" or "Stevens Point Real Estate Agent"
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Process of a Sheriff Sale
Sheriff's Sales are often held on the local courthouse steps. They occur after the current homeowners are given a grace period on their loans. The property is subsequently offered to the highest bidder at the auction.
They are called Sheriff Sales because the auctioneer is often local law enforcement. The price can be higher or lower than the “judgment amount,” which is the amount the court determines the defendant owes.
Post-Sale Considerations
Once the Sheriff's Sale is complete, the house purchaser will typically be given 30 days to pay the judgment amount on the property. Then, assuming all goes well and the previous owner doesn’t exercise their right to redemption, you can close on the property and receive the official deed. At this point, you own the property and can take possession of it to make repairs as necessary.
Once you own the property, you will often want to take out a Loan Assumption, in which you assume the current homeowner loan, essentially taking over where they left off.
Legal and Homeowner Rights
This is where a Sheriff's Auction can get tricky. The Current homeowner has a right of redemption and can pay back the mortgage at any point before the final Sale.
Conclusion
A sheriff's Sale can be a great opportunity to buy a home at a discount price. However, it's important to understand the process. From Bidding and Payment Procedures to Homeowner Rights, it's never guaranteed that you will get the Sale.
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