A sheriff's sale is more commonly known as a foreclosure auction. The auction is conducted in front of the county court house or in front of the property itself. After the sheriff's sale there are certain requirements and actions that need to be taken on behalf of the new buyer or the bank if they retain the property.
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Foreclosure auctions are held the first Tuesday of each month. It is commonly referred to in the real estate industry as "foreclosure Tuesday".
During the auction anyone is free to bid on the property, to include the home owner or the home owner's family members.
If a high bidder is found at the auction they will need to make a earnest money deposit and confirm funds for the remainder of the sale price within the next few days. However, if no bidders meet the reserve amount that the bank requires to sell the house at auction, the bank will retain the property as a real estate owned (REO) property for later sale on the open market.
Confirmation of Funds
If a bidder is successful in making the winning bid on the house at auction they will need to make an earnest money deposit with the county appointed official that is regulating the auction. Within 5 to 10 days following, the buyer will need to provide either proof of funds for the balance of the sale price or show approved financing for the balance.
If the county official is unable to confirm the buyer's funds or confirm approved financing within this duration, the earnest money deposit is retained and the house will either be auctioned again at the next foreclosure sale, kept by the bank or sold to the next highest bidder.
Whether the home was auctioned off to the highest bidder or kept by the bank as an REO, the property will require inspection. This is to evaluate property condition, required repairs, possible contamination, health hazards or any other property defects.
The buyer can perform this inspection themselves or hire an independent inspector. If the property is a REO, either the asset manager or a real estate agent will perform the initial inspection and hire third parties as necessary.
During the inspection the buyer or the bank will also evaluate if someone is still occupying the property. Occupants could be current tenants or the home owner that was foreclosed upon.
Since the deed and all ownership rights are transferred upon conclusion of the sale (validation of funds or upon the retention of the property by the bank) the property is occupied those occupants are trespassing and can be removed or evicted.
If the property is occupied, the new owner or asset manager will file eviction paperwork with the county recorder's office. This paperwork is then passed off to the sheriff's department. This can be as little as a few days or as long as a few weeks.
The sheriff's department will serve the occupants with the notice of eviction, ordering them to vacate the premises in the next 72 hours. If they fail to do so, they can be forcefully removed by the sheriff's department and all personal belongings taken from the residence and placed outside.