Meaning

In broad terms, Sheriff Sales refers to an auction sale of a property to recover due from a defaulting party. These forced sales are often packaged as attractive deals for the prospective buyers, which undoubtedly ensure promising returns.

Often referred to as foreclosed properties, these properties come in the possession of a mortgage lender, when a borrower defaults on the principal or interest repayments. The lender later disposes them off to recover the due amount.

• Preliminary search. It is a good starting point to shortlist properties listed across various databases based on preliminary requirement criteria.
• In-person visit. A personal visit to the site of purchase should be made for assessing any flaws related to the physical condition of the property.
• Legal matters. Sometimes, the terms of agreement between the mortgage lender and the defaulting owner give the lender the right to reclaim the property after repaying the auction purchase price to the buyer of the foreclosed property.
• Expert advice. Apart from the reclamation provision, there could be various other fine legal points that need attention from the buyer. Therefore, it is important to hire the services of a legal expert, experienced in the matters of foreclosure sales. This becomes even more important because different states have different sets of laws and regulations in place.

• Discounts. The properties put on auction largely carry huge discounts from as low as 10% to as high as 50%, on the market value. The auctioneers are focused more on recovering the sum defaulted upon. Therefore, there is minimum attempt from the side of lenders or the coordinating Sheriff to command the highest possible price for the property on sale.
• Maintenance. Maintenance of the property is a key point to investigate, right at the time of purchase. This helps in saving a lot of cash outflow on repairs and upkeep later on.
• Payoffs. The foreclosed properties can be acquired not only for residential purposes, but they can also find place as promising real estate investments. The appreciation in property prices over the period can translate into huge profits.