Sheriff Sales - How they work
I am often asked by my investor clients that “What if we go downtown and buy a property at the Sheriff sales?” My response is, “Great, but you need to do some homework.”
When you buy a foreclosure whether that be bank-owned foreclosure or government owned foreclosure, all the possible liens and incumbencies have been wiped out. You have no risk of an undisclosed lien. When you buy a sheriff sale it does not guarantee that all the liens are wiped out. The sheriff sale wipes out the first mortgage but it does not wipe out 2nd or 3rd mortgages or tax liens or other subsequent liens. Before you buy a sheriff sale, you really need to have some title work done, at least a title search to check for other liens. You have to check what you may be liable for. If you think you are getting a screaming deal at Sheriff Sale and there is 2nd mortgage lien for $30,000 and a tax lien of $20,000. You are paying that $50,000. That’s coming out of your pocket.
Now, sheriff sales can be a great deal. I am not telling you not to do it but what I am telling you is that you need to do your research. Learn more about Sheriff Sales. Make sure you do your research on a particular property you are making an offer on, so you don’t get stuck with somebody else’s bills. If you have questions about sheriff sales or you want to talk about it, please contact us at our website. We’ll be happy to answer your questions.