Sheriff's Sale
Buying Property at the Sheriff’s Sale
There are many ways in which an individual can proceed with obtaining a home. Some individuals purchase their homes on the general market while others receive the homes as a gift or inheritance. One way in which individuals have obtained homes is via a Sheriff’s sale. This auction provides a way for prospective homebuyers to view their residential options and bid on them in a collective sale atmosphere.
The way in which homes come up for sale by way of a Sheriff’s sale is due to foreclosure. Foreclosure occurs when the homeowner can no longer make payments on the house and the house gets repossessed by the lender. Once foreclosure has occurred, the house will be put up for public auction, i.e. Sheriff’s sale, and be supervised by the local county court. The individual or entity who posts the highest bid on the house becomes the new owner. It is important to note that the new owner is quite often the prior lender. Before jumping into the purchase of a home via Sheriff’s sale, it is important to look at the pros and cons that go along with buying a house in this manner.
Sheriff’s Sale - Pros
There are quite a few pros associated with buying a house via a Sheriff’s sale. The first pro of buying a house in this manner is that the price is right. Homes up for sale at an auction of this type will most likely receive a winning bid that is far less than the current market value of the home. Therefore, whether one is looking to live in the house that they purchase or sell it later on down the road, they are sure to save some money by purchasing the house this way.
Also, homes which are sold via Sheriff’s sale are usually advertised far in advance of the auction date. This allows the prospective homebuyer time to look into the property and determine if it is worth the bidding. These homes can be advertised anywhere from 1 month to 8 months in advance, depending upon the area in which they are being sold. The time frame from advertisement to auction is a lengthy one which allows adequate research to be performed.
Lastly, by bidding on a home at a Sheriff’s sale an individual may be that much more likely to win the bidding wars due to lack of competition. Since there are so many Sheriff’s sales being held in a given area, one can rest assured that not too many people will show up to bid at these types of sales and their competition may be quite slim at times.
Cons of Buying a House at a Sheriff’s Sale
With the good comes the bad so there should be no surprise that there are also cons with regard to purchasing a home via a Sheriff’s sale. One con is having to obtain the cash in order to bid on the home. Frequently the only way in which an individual can pay for the house is via cashier’s check or cash. This may make it difficult for some individuals to buy the house as they cannot finance it.
Another con associated with the Sheriff’s sale deals with the auction process. Since many individuals are purchasing homes via Sheriff’s sale for the first time, they may be unfamiliar with the bidding process and thus more likely to make mistakes. This could lead the individual to not getting the house they wanted or buying a house which they really didn’t want in the end.
Another problem which could be associated with Sheriff’s sale home purchases relates to tenant or land issues. Sometimes homes will have tenants in them still or have land issues such as contamination or zoning problems which will affect the new owner’s right to the property.
Also, when buying a house via a Sheriff’s sale, the new owner will need to pay for the home within a certain period of time and this time restriction could cause problems for the new owner. Frequently one will have to pay the entire amount anywhere from 30-90 days from the time of winning the auction and failure to do so may result in losing the house.
Lastly, those who buy a home through a Sheriff’s sale may not have the opportunity to inspect the property. This in and of itself can lead to serious problems down the road and the new homeowner may have just paid too much for a house due to the existing condition thereof.
Sheriff sales process
There are a few ways for the prospective homebuyer to adequately prepare for the Sheriff’s sale. The first is to do one’s research with regard to the Sheriff sales process. By attending one or two Sheriff’s sales prior to the specific one in which a bid is going to be entered will enable the individual to learn more about the auction itself. Once the Sheriff’s sale process is researched it is then important to look into pertinent factors relating to the desired home. This will help to ensure that the home is exactly what one is looking for and worth bidding on.
The prospective homebuyer should also consider having a title search done on the desired home prior to bidding on it so that they can determine that there is good title to the home and one is getting exactly what they believe to be. A title search will cost a small amount of money and be well worth it in the end.
Lastly, individuals who are going to be bidding on a home at a Sheriff’s sale should be sure that they have enough cash to purchase the home. If one is unable to pay for the house, there is no reason to go through the Sheriff’s sale process.
Summary
The aforementioned items are a few factors that individuals should be aware of when looking into attending a Sheriff’s sale. This is a beneficial way to purchase a home and if done in a proper manner, one may find that the perfect house is out there waiting for them at a Sheriff’s sale.
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