Sheriff's Sale

[dooleysm]

There is a double-wide trailer on 2 acres adjoining my land that I know has been abandoned. I know the woman that owns it (for the time being) and I know how much she owes on it. She is willing to sell it to me for what she owes. However, this is more than I am willing to spend and I believe it is more than it is worth.

I called the bank that has the mortgage on it and they are unwilling to deal with me on it until after the property has gone through foreclosure and through a sheriff's sale. As I understand it after the property is foreclosed there is a sheriff's sale where anybody may bid on and purchase a property. I also believe that the bank tends to send a representative there that makes sure the property sells for some amount, likely near what they are owed on it.

I'm not real clear on the sheriff's sale though and all my knowledge is just heresay. Does anyone out there know more about this process?

 

[dmccarty]

We had a similar situation years ago. A house was about to be foreclosed and we knew what the house was worth. The asking price was much, much higher than what it was worth.

After talking with a couple of lawyers our understanding was that once the house was foreclosed it would be sold at auction at the courthouse to the higher bidder. The banks would "bid" what they were already owed so we would have to be higher than the loan amount. Then any liens on the property would have to be delt with.

Talk to a local lawyer or two, none of them charged us for the talks we had, and visit the courthouse to talk to the county employees. We found them very helpful. The county can tell you if there are any liens on the place.

Later,
Dan

 

[Jimbrown]

We have two types of foreclosure sales here. Sheriff sales where the sheriff auctions it off to the highest bidder. Unless there is some underhanded dealing it will usually go for close to prevailing price. realtor's ect buy em up. the other is a tax sale where the county has foreclosed for taxes. These are usually stuff no one really wants. You can buy these two ways just go to the court house and pay the tax or wait for it to go to auction. They will not sell for less than the owed taxes. But there are literally hundreds of lots for sale in the county just for taxes ( less than a$1000) most are mobile home lots in defunct mobile home parks. Or land that was part of some fly by night real estate deal in the middle of no where no power, water, roads ect.

 

[MossRoad]

Be careful with those sales. Sometimes you can buy the house for what the person owes in back taxes. However, the person has a year from then to pay you for the taxes and the interest, then they get the house back. You make the interest if they do it and you get the house if they don't. I read something about Indiana's rules and to sum it up, there are 92 counties in Indiana and that means there are 92 different sets of rules!

 

[2manyrocks]

You need to get some legal advice before you bid. There may be a little information here, but only a little, and there are usually many, many issues to consider before bidding at a foreclosure sale. Sheriff's Sale FAQ's

My guess from what you have said is the bank is foreclosing, but the Sheriff has to conduct the sale in the county where the property is located. The bank is probably going to make a bid to prevent the property from being sold too cheaply relative to what the bank thinks they can get for it, but the bank probably won't make this public until it bids at the sale. The bank may not care and just bid what they have owed against it and then try to resell for what it can get.

You need to be sure about the title and the presence of other liens before you bid. For that, you need a title examination. Of course, the property condition is also something you may be taking a chance on if you can't get inside the house to look at it before the sale.

 

[chh]

There was an article on forclosure's and sheriff's sales in a newspaper here in Oklahoma not too long ago. The thing that caught my eye on it was that something like 98% to 99% of them sell back to the lender and that they are usually the only bidder.
A piece of property near me sold not long ago at a sheriff's sale after foreclosure, the guy who bought it got it direct from the bank. He had actually made a deal with the bank to buy the property before the sale, but on legal advice let it go thru the sale to settle all/some of the title issues(or at least that is the way he explained it to me).

 

[MossRoad]

There was an article on forclosure's and sheriff's sales in a newspaper here in Oklahoma not too long ago. The thing that caught my eye on it was that something like 98% to 99% of them sell back to the lender and that they are usually the only bidder.
A piece of property near me sold not long ago at a sheriff's sale after foreclosure, the guy who bought it got it direct from the bank. He had actually made a deal with the bank to buy the property before the sale, but on legal advice let it go thru the sale to settle all/some of the title issues(or at least that is the way he explained it to me).

There's a lot of shady, almost legal stuff that goes on at those sales. For example, back in the early 80's my grandmother sold a house on land contract to buyer Adam. A couple years later, a man named Charlie contacted her and told her he was sorry, but could no longer make the tax payments and the house was going up on a Sheriff's sale. She asked who the heck he was? Turns out Adam forged her name and sold the house to Bob who forged her name again and sold the house to Charlie. Something weird happened in there and some how it got on a Sheriff's sale for back taxes under Adam's name. Anyhow, my dad got a lawyer, went to the tax sale and watched who bought the house back. It was Adam... who also happened to be a local police officer. As soon as the sale completed, dad and the lawyer approached Adam, told them they knew what he was up to and offered him a "deal". Grandma got her money back.

 

[dooleysm]

So you guys think that the bank will be there ready to bid about what they are owed on the mortgage? Seems like a terrible deal for them, but maybe it's just a bunch of people following their policy.

I tried to deal with them to avoid the whole foreclosure mess, but they were completely unwilling to deal on it. They kept telling me that they don't own it yet so there's nothing they could do. I know the other side of the story and I know that the house will go through foreclosure. It seemed to me that they would jump at the chance to avoid foreclosure. I don't know what that costs, but I do know it takes time, and they are losing out on interest every month that trailer sits there.

I guess I can check at the courthouse to make sure there are no other liens on the property and then I'll get a HELOC and show up to the sheriff's sale and see what happens.

 

[jdbower]

You can also talk to a realtor or lawyer about making a "short sale". Essentially if the house is worth $50 and the mortgage is for $65 sometimes the bank will take an offer of $50 and write off the $15 loss. This helps them because they'd probably get about $50 at auction anyway and they don't need to go through a foreclosure. Unfortunately the banks are pretty obtuse about streamlining this process so it takes several months and there's no guarantee they won't reject even a fair offer. I have no idea how to navigate this system without the help of a properly trained realtor or lawyer - both of whom cost money. Perhaps if the property is listed as for sale by owner you can get to talk to the bank yourself (assuming your state doesn't require an attorney for sale).

 

[Duffster]

....They kept telling me that they don't own it yet so there's nothing they could do.....

That is because they don't own it until they buy it at the Sheriffs sale.