Profile picture for ann1067

How hard is it to beat the banks bid at a sherrifs sale? Please Help

I have been researching sherrifs sale for 2 mo now, have obtained a title search and have everything together from a legal, down payment and loan standpoint. Please don't comment on the process because I don't need advice on the risks, benefits or steps I need to take legally (got all that covered). I want to know from people who have gone to sherrifs sales if other people besides the bank get lucky enough to be the winning bidder? It seems from my research, the banks are usually the highest bidder. I alsohave noticed not many o these homes are being bid on by the public... Just the banks show up? The house I am lookin at (and have saw the inside when it was on the market), is apprasised at 150,000, starting bid is 100,000. I looked up the judgment and the homeowners owe 180,000. Do you think a bid of 120,000 could get me the home????
  • September 11 2011 - US
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Answers (4)

Profile picture for Reallyfedup
Banks don't bid on properties at sheriffs sales.  They already have a right to that property as lien holder. There is usually a sale price that needs to be met in order for the sale to happen.  If that sale doesn't get met, then the property goes back to the bank since they are the lien holder.  That's probably why you see the banks getting the properties.

In this situation you mention that there is a starting bid of $100,000.  That's probably the number the bank is looking for, and anything above that is a bonus.  So at $120,000 you are higher than what the bank is looking for.  That part is ok.  Only issue would be a higher bid and or cash buyer.  Most of these buyers are cash buyers, but if no one else is bidding, they may consider a mortgage buyer.  Good luck
  • September 11 2011
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It really depends on your area.  I have bought many homes at sheriff sales, and for much less than they are worth.  Every 2 weeks we have a Sheriff sale and I would say about 20-30% of the homes here are bought by the public.  I have found that it will also depend on what Bank you're dealing with.  Some banks never bother bidding on the properties while others will buy it back no matter how high the bidding goes.

Also another factor on how high the bank will bid it up is the type of loan that was on the home.  You will find that FHA and VA loans are much more likely to get bought back by the bank then to let the bid go low for a private bidder.  Your best bet for getting the home on the cheap is if it was a conventional loan I have found.

Hope that helps and best of luck to you!

Shannon Sherman

  • September 11 2011
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"Down payment and loan standpoint"  Sorry, sherrif sale "all cash" to be shown before entitled to bid.

David Cooper
  • September 11 2011
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Profile picture for Connie Klemme
Here's the thing.  consider that outbidding the bank might mean you paid more than if you'd waited for the bank to do their thing and then sell it as a foreclosure.

I'd had an REO listing a few years ago that I like to keep as a reminder of how banks behave sometimes but this was 2005 during bubble   The mortgage was $350k, the house appraised at $380.  The Bank ran the bidding up to $410k at sherrif auction.   then put in on the market a few months later for $340   and sold it for $325 after it sat on the market for 2 months. (the market was better then and they still listed it for less than what was owed-after auction).

the point is...if the buyer had gone to the auction to beat the bank, he'd have paid $410+ for the home. THIS IS JUST ONE EXAMPLE. but I woudn't expect to buy it at auction if the bank is there unless you want to pay too much.

as far as that home goes...what you might get it for depends on too many factors that no one could really comment on without SEEING the property and the surrounding area etc.  and even then...it depends on who else wants the home and how much they want it and what issues it has.
  • September 11 2011
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