A sheriff’s sale is an auction used to sell properties on which a borrower has defaulted. It is not the same as tax sales. The properties are auctioned due to court-ordered foreclosures, and buyers must accept them as-is. Prospective buyers bid on properties, and initial offers are usually low.
A sheriff’s sale is an auction used to liquidate property on which a borrower has defaulted. It allows banks and other financial institutions to recover money lost when a borrower defaults on a loan. Some people confuse sheriff sales with tax sales, but the two are not the same. Tax sales are used to liquidate properties with tax liens against them instead of auctioning homes lost in foreclosures.
Properties auctioned off in a sheriff’s sale are there due to court-ordered foreclosures. This means that a homeowner has defaulted on a mortgage loan and the bank that issued the loan has sued him. If the bank proves its case in court, proving that the borrower did not pay as agreed, it has the right to sell the house. The bank then puts the property up for auction in a foreclosure sale.
In some places, an auction for foreclosed properties is not called a sheriff’s sale. Some jurisdictions simply refer to these auctions as foreclosure sales. There are many other regions, however, that require a sheriff’s office to administer the sale. This is why foreclosure auctions in these areas are referred to as sheriff’s sales.
When an individual participates in a sheriff’s sale in hopes of purchasing property, he must be prepared to accept any property he purchases as-is. Typically, homes offered for a sheriff’s sale are not available for pre-auction inspection. This means the buyer is making a purchase without seeing the inside of the home or knowing its condition. Neither the sheriff’s office nor any other party involved in the sale makes any claims or offers guarantees on the properties at auction. A prospective buyer can walk past a property and see it from the outside, but has no legal right to enter the property.
Sheriff’s sales are public auctions and prospective buyers bid on properties of interest. Each property goes to its highest bidder. Initial offers on foreclosure properties are usually low and vary based on the laws of the jurisdiction where the sales are taking place. In many places, the bank or financial institution that issued the loan for the foreclosed property makes the opening offer. While initial bids on these homes may be low, foreclosure auctions can be competitive and properties can sell for significantly more than their initial bids.
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