Posted in Finance, Accounting and Economics Terms, Total Reads: 264
Definition: Sheriff’s Sales
Popular in US, this refers to an auction method where the owner has exhausted all options of repaying the loan amount for the home owned and is not able to find any refinancing, hence defaults. The court then grants the permission to the sheriff to auction the property so that some cash can be generated. One of the main advantages of buying distressed properties at sheriff’s auction is that such properties are available at a lower amount than the fair price.
Proper research is essential to identify all the risks associated with a distressed property before purchasing at a sheriff’s auction. Advertisements regarding sheriff’s sale are usually come out 6 – 8 weeks before the auction date and sometimes even few months before the auction.
There are 3 types of auctions: mortgage foreclosure, tax lien and tax sale. The winning bidder has to immediately submit 10% of the amount and rest at a later stage to the sheriff’s office within 30 days. A number of properties can be put up for sale at the sheriff’s sale and each property is approved by a writ petition from the court.