sheriff sale

chicagoerinApril 29, 2013

hello-has anyone done one or more sheriff sales for purchasing a home? In my state, OH, you have 30 days to get a mortgage which my lender is saying will not be an issue and bidding starts at 2/3 appraised value of home which means there are some great bargains to be had. I have a "mentor/friend" assisting me who has done 4 of these and made money off all of them. We did a title search and there are no additional liens. I have talked to one neighbor about the house and the constrcution quality, but don't want to talk to too many more neighbors for fear the word will get out on the's a very desirable area and I want as little competition as possible.

My friend has never had anyone bid against her..not the bank or another buyer, but I expect it for this one since it's a super desirable neighborhood.

I have knocked on the owner's door many times and she doesn't' answer. She declared bankrupcy three years ago so I am sure she has had people trying to track her down for years. I wrote her a sympathetic letter and offered her $100 gift card if she would let me in to see the layout and check out foundation, etc. Doesn't look like that will work as she hasn't responded.

I am convinced it's a great buy for up to 40k over the ask price and am planning on the inside being neglected and am planning on buying it without seeing it, if I have to. I bought a horrible REO two years ago so I am not scared off by cosmetic stuff. I have pulled comps and it all checks out.

My question is this..what else should I be researching to avoid surprises and does anyone have any other strategies for buttering her up to get in the house prior to bidding on it?

thanks much

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"offered her $100 gift card"

Cash would be better.

    Bookmark   April 29, 2013 at 1:59PM
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Go to a sale before the day you plan to bid to see what is what for yourself. You will find out if the sale is literally on the steps, or in an alcove in the court house, and if it changes for weather (if outside). You also want to see how the bids are accepted for yourself. People can tell you, but things may change and there is nothing like knowing for yourself. When you attend your first auction, most people there are happy to talk about the process. My first sheriff sale I got an education and more (and no, I did not bid on anything, it was reconnaissance).

See what the percentage of the bid deposit is, and what form of payment will be accepted. Since you know payment in full is due within 30 days, the deposit is the other part of that equation.

Call all the utilities. You will be surprised how much information they know/will give. Find out exactly how much is owed on the water/sewer and if you assume those costs. Do a google map view. If your county has GIS, make use of it.

Doing a title search in advance was smart - not sure what your thoughts are on just-in-case title insurance. Hubby discovered a house he was interested in actually was surveyed so the back house owned the living room of the front house (it was a weird jig in the lot). The house was over 120 years old too!

Does the sheriff evict before or after the sale? Costs if after?

    Bookmark   April 29, 2013 at 3:17PM
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thanks xamxs..hadn't heard/thought about title insurance for something like this.. will check it out!

sheriff evicts after the sale. I already know the deposit it 10% of the appraised value and have that lined up.

am taking my mentor with me to the auction, but do plan on going next week (two weeks prior to mine) to check it out for myself. good advice.

great advice on the utilities will do that soon. thanks much!!

    Bookmark   April 29, 2013 at 4:28PM
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Suzi AKA DesertDance Zone 9b

You will be up against investors with CASH! You want to play with the big boys, make sure you have cash. Loan approval loses easily to cash.

This post was edited by desertdance on Mon, Apr 29, 13 at 17:38

    Bookmark   April 29, 2013 at 5:36PM
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When you get a loan for this house the lender will require title insurance.

    Bookmark   April 29, 2013 at 5:59PM
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Terriks not sure why cash would matter? Highest bidder wins . The only money they accept the day of sale is deposit .. No more no less they have no idea who is getting a loan and who is not since its not due for 30 days.

    Bookmark   April 29, 2013 at 9:41PM
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In many (maybe all?) areas of Missouri you better bring cash or be able to have a cashiers check by the end of the day. There are definately some deals on Sheriffs sales but people that are owed money by the seller have gotten smart and will file a lien a day before the sale so it doesn't show up in the title search.

    Bookmark   April 29, 2013 at 10:15PM
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Great advice. Had this happen to me on a vacation property down at Lake of the Ozarks. Literally had three liens filed 12 hours prior to auction.

    Bookmark   April 29, 2013 at 11:26PM
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(ha! Tony, I seem to recall LOTO stands for Lake of the Ozarks... Am I right?)

    Bookmark   April 29, 2013 at 11:39PM
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Only purchased 1 property at a municipal auction. I didn't do my homework and lost money on that deal. Trying to evict the previous owners renter was a nightmare. It cost me 3 months of carrying costs and a few thousand in legal fees plus I had to pay off the squatters to get them out. The place was a grow house, party hangout and Pit Bull puppy farm, it had to be gutted to the studs and floor joists. Never again.

Good luck.

    Bookmark   April 29, 2013 at 11:46PM
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LOTO=Lake Of The Ozarks :)

    Bookmark   April 30, 2013 at 7:22AM
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The house across the road from me went up for foreclosure auction twice. The house was nothing special, a nice 4 BR cape with a garage on 3 acres. The appraised value was $250K, and the amount due on the mortgage was $200K.

The first time the minimum bid was the amount due, and naturally nobody bid. About 6 months later the second and "absolute" auction was held. My new neighbor bought the house for $125K. He had to have $10K cash or certified check the moment the hammer went down, and he had 30 days to come up with the balance. He had already been pre approved for a mortgage so all went smoothly.

The owners were evicted long before the first auction so the house sat vacant for a year.

    Bookmark   April 30, 2013 at 7:37AM
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I own more than twenty high end homes in Cuyahoga, Summit, and Geauga counties and have bought all of them at sheriff sale so I know a thing or two.
(1) Financing does not happen period. Loan officers lie. If you dont have backup plan to pay full price and then get financing five to six months later, don"t even think about it. It will be a very costly mistake.
(2) Success rate of getting a good house (even for a person like me who bids pretty much on every house more than 3000 sq ft is 15:1. It becomes frustrating when you are buying a house to live not invest.
(3) Check the judgement amount in court docs. It will give you an idea if bank would let it go.
Call me if you need more guidance.
Again remember financing does not happen!!

    Bookmark   May 6, 2013 at 10:56PM
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kabir-thanks so much for the info.. is it possible that it is different from state to state? as I have a friend who has bought three sheriff sales in my county in the past three years, and financed two within 40 days, no problem. the other was cheap, so she paid cash.. is there anyone on this board who is in ohio and has done a sheriff sale? if so, please weigh date is coming up. I am also consulting a local real estate attorney and appreciate you raising the concern, kabir, bc I will ask him. thanks!!

    Bookmark   May 7, 2013 at 1:07PM
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All the info I provided is for OHIO. three counties I mentioned are suburbs of Cleveland.

    Bookmark   May 7, 2013 at 1:48PM
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You will be wasting time and money consulting an attorney. There is no role of an attorney in this process.

    Bookmark   May 7, 2013 at 2:54PM
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What is the usual process when the bank buys the house back at the sale? I think I know, just not sure.

There is a house I noticed was going to be sold on the courthouse steps I checked the foreclosure records and the loan balance was listed as $143,859.36. The bank bought it back because there were no bidders (at the opening bid).

House would probably sell $60K-$70K.

How long do you think it will take for the bank to put in on the MLS? Do they usually try a second auction (or are they required to try a second auction).?

Truthfully, I hope they don't get it on the market too quickly. We need to finish and sell ours so we have the funds to buy it.

    Bookmark   May 8, 2013 at 8:53PM
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Once the bank buys it at sheriff sale the give it to their REO department and depending on who they have contract with(Howard hanna etc) it gets listed six months later.

    Bookmark   May 8, 2013 at 9:37PM
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Good, that's what I thought. I am hoping it will hit the market in Nov when things are really slow, and they will be happy for us to take it off their hands before the end of the year :)

Is there anyway to tell at this point if Fannie Mae is or is not involved? Would they have already stepped in?

Wondering if it will show up on Homepath..

    Bookmark   May 9, 2013 at 7:43AM
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"Is there anyway to tell at this point if Fannie Mae is or is not involved? Would they have already stepped in? "

The note holder may have registered the transfer in the court records, but often not. Why pay a recording fee, there is already record of a lien, it just may not point to the actual holder.

Multiply a million loans by a $20 recording fee and you have spent a lot of money.

Fannie ad Freddie do not "step in" for the most part.

They pay 'loan servicers' for that.

    Bookmark   May 9, 2013 at 11:25AM
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No they have not recorded the transfer yet, and here in Maryland it's A LOT more then $20. If I look it up in the MD Tax Records it's still in the borrower's name.

They usually wait until they sell it, and many times I see it listed in the MLS that the seller WILL NOT pay the transfer fees, and they must be paid by the buyer.

Original Mortgage company was Homecomings Financial, and the mortgage was later transferred to GMAC.

So far the timeline has been roughly:
12/19/2012 - Foreclosure filed. Affidavit of Debt Balance Owed $143,859.36, Military Affidavit, Loss Mitigation etc.
01/14/2013 - Line to File Foreclosure & Affidavit of Service to borrowers.
04/11/2013 - Bond Approved and filed; $25K

Do you know what the bond is for?

Do you know why some foreclosures go to Fannie Mae (Homepath)

    Bookmark   May 9, 2013 at 5:56PM
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