How to Purchase a Home at Sheriff's Sale

When a homeowner stops making mortgage payments, the home will eventually go into foreclosure. If the homeowner still refuses to pay, then after a certain period of time the home will be sold at auction. To purchase one of these homes, you’ll need to track down sheriff’s sales and be prepared to pay the full amount in cash shortly after putting in the winning bid.

The foreclosure bidding process only takes place after a homeowner has had plenty of opportunities to keep the house. At that point, the home needs to be sold in order to make sure the remaining mortgage balance, property taxes, legal fees and any other expenses are paid. Since the home is in foreclosure, you can often get a good deal at a sheriff’s sale, but you will likely be competing with others, some of whom are savvy bidders.

Often a property that goes into foreclosure is sold at an auction held by the lender. The lender recoups its debts and makes sure overdue property taxes are paid up. Properties sold at a sheriff’s foreclosure auction are ordered to be sold by the court. You can get a deal on a foreclosure at either type of auction.

There are various ways to find foreclosure homes, but sheriff’s sales can bring great opportunities. To find sheriff’s sales, search your local newspaper or real estate magazines for your area. You can also pick up the phone and call your county clerk’s office to inquire about any upcoming auctions. Also check your county clerk’s website to see if they have auctions listed.

Today, often the best place to find foreclosure auctions is through a basic web search. Type foreclosure sales or sheriff’s sales into your favorite search engine and filter by your area. You can find out about foreclosure auctions of all types through Auction.com, which lists auctions taking place in various areas of the U.S.

Before you show up for a sheriff’s sale, it’s important to fully understand the foreclosure bidding process. You’ll be competing against others, and many of them may be experienced property investors. In order to even participate in the first place, you’ll need to be able to pay off the full balance in 30 to 90 days. In some areas, you have to pay the full balance on the day you win the auction or within a few days.

Foreclosure homes also tend to have liens or judgments against them, which means you take over those issues as the new homeowner. Before you attend the auction, perform a title search to identify any problems that could come back to haunt you if you’re the winning bidder.

Due to the short turnaround time, foreclosure homes don’t give you the benefit of a property walk-through or inspection before you commit. That means in the days leading up to the auction, you need to seriously research the property and make sure it’s in good condition. Even if you study property values in the area, though, there may be damage you don’t know about when you commit to buy, and you won’t be able to require repairs be made before closing as you can with a typical home purchase.

Before the auction, make sure you have everything you need to participate. The foreclosure bidding process can be quick, with some homes selling in a matter of minutes, so make sure you arrive early, prepared with a maximum bid amount. There will likely be multiple properties, so you’ll need to listen carefully to make sure you don’t miss your property.