Sheriff’s sale Properties - How to make a quick profit.
One of the best known methods of making a quick profit from the sale of real estate is to purchase foreclosures at a
Sheriff’s sale or as some folks call it… and Auction. However you do want to tread very carefully, as you can loose your shirt in a deal like this if you are inexperienced. The actual sale of a property by the Sheriff, is actually deep into the foreclosure process, as many steps have occurred long before the Sheriff gets to establish the sale. Long before the Sheriff got involved, the homeowner was having major financial problems and had defaulted on the loan with the financial institution. The Sheriff’s sale, is actually one of the very last steps in the foreclosure process.
Approximately half of th states use a process called “judicial” to manage the foreclosure process from start to finish.
This judicial process begins with the actual loan/mortgage doument which is the security device that was used to pledge the
property as a security against failure of the loan. Once the homeowner fails to make the mortgage payments on time, the lender will use the foreclosure process to end the homeowner’s rights to possession of they property. This is referred to as a default by the home owner. For the lender to take over the possession of the property, the lender must go to court and prove that the home owner did not perform as required by the mortgage instrument and that the lender now should have the right to the property.
If the lender wins in court and is awarded a judgment in regards to possession of the property, the lender can now petition
the Sheriff to carry out the sale as permitted by the court. The Sheriff will advertise the property for sale at public auction in the county where the property is located. The bidder that is successful will now become the new property owner.
In most cases, the lender will bid what is owed on the property so that a successful bidder must actually pay at least a minimum of what is owed on the property. If no one bids over that of the lender, the lender then becomes the owner of the property. That actually happens in about 80 per cent of the cases.
Normally the lender will have an attorney or representative on site to make the initial bid to get things started. At the auction, expect to see many investors, curiosity seekers and onlookers to be at the proceeding. In some cases, a second mortgage holder will be at the sale attempting to salvage what he can from his claim.