What happens if two people bid above the judgement at foreclosure auction.

Columbia, South Carolina
Foreclosures
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What happens if two people bid above the judgement at foreclosure auction.

Bob Ward
Member since 2020 · 19 posts · 8 votes

Thank you for help. At a foreclosure auction with the judgement being $65K what happens if multiple people bid over $65? A call to the county Master in Equity office we were told anything over the $65 would be the subject of a hearing held at a later date to determine who gets the extra $ above andbeyond the 65K.  

If we are forced by other bidders to bid as high as $90K and we "are" the high bidder we would only pay the court the $65K?  With the "high bidder hat" just being a symbol of who gets the property?

 Thank you.

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Mike Kirby
Rental Property Investor · New Braunfels, TX · Member since 2021 · 290 posts · 257 votes
6mo
Quote from @Bob Ward:

Thank you for help. At a foreclosure auction with the judgement being $65K what happens if multiple people bid over $65? A call to the county Master in Equity office we were told anything over the $65 would be the subject of a hearing held at a later date to determine who gets the extra $ above andbeyond the 65K.  

If we are forced by other bidders to bid as high as $90K and we "are" the high bidder we would only pay the court the $65K?  With the "high bidder hat" just being a symbol of who gets the property?

 Thank you.

That's not the way it works in Texas. Whoever wins the high bid pays the high bid. The county keeps the overage and if the original owners are smart they can claim the overage. If not, the county keeps it. You will have to find out from your local county how it actually works for your area. 
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  • Mike Kirby
    Rental Property Investor · New Braunfels, TX · Member since 2021 · 290 posts · 257 votes
    6mo
    Quote from @Bob Ward:

    Thank you for help. At a foreclosure auction with the judgement being $65K what happens if multiple people bid over $65? A call to the county Master in Equity office we were told anything over the $65 would be the subject of a hearing held at a later date to determine who gets the extra $ above andbeyond the 65K.  

    If we are forced by other bidders to bid as high as $90K and we "are" the high bidder we would only pay the court the $65K?  With the "high bidder hat" just being a symbol of who gets the property?

     Thank you.

    That's not the way it works in Texas. Whoever wins the high bid pays the high bid. The county keeps the overage and if the original owners are smart they can claim the overage. If not, the county keeps it. You will have to find out from your local county how it actually works for your area. 
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  • Mitchell Hammack
    Investor · Tampa · Member since 2023 · 13 posts · 3 votes
    6mo

    Likewise, in Florida, the overage will be held by the county until a hearing to decide on the dispursement of excess proceeds. If there's a federal tax lien the irs may file to have the excess go to them. Otherwise, it may go to subordinate liens or even the owner being foreclosed upon.

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    • Jay HinrichsBusiness Member
      Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
      6mo
      Quote from @Mitchell Hammack:

      Likewise, in Florida, the overage will be held by the county until a hearing to decide on the dispursement of excess proceeds. If there's a federal tax lien the irs may file to have the excess go to them. Otherwise, it may go to subordinate liens or even the owner being foreclosed upon.


      IRS has to redeem they have to take the entire property and take title to it.. thereby unwinding the sale and paying the winning bidder back what they bid plus interest plus any money the winning bidder might have spent of securing the property.. but not improving the property so that is the risk with buying foreclosures with IRS liens then jumping right in and rehabbing. 
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  • Ned CareyPro Member
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    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    6mo

    @Bob Ward How did you come to that conclusion?  If you bid $90k you pay $90k plus any other associated costs.  What happens to the surplus above what is owed is irrelevant to the bidder. 

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  • Carson Nordmann
    Member since 2026 · 119 posts · 45 votes
    6mo

    Worth talking to a SC foreclosure attorney before you bid. The surplus hearing determines who gets the overage (junior liens, then the mortgagor), but the winning bidder pays the full bid amount, not the judgment. The bid is what you owe. Misreading that at $90K is a $25K mistake.

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    • Jay HinrichsBusiness Member
      Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
      6mo
      Quote from @Carson Nordmann:

      Worth talking to a SC foreclosure attorney before you bid. The surplus hearing determines who gets the overage (junior liens, then the mortgagor), but the winning bidder pays the full bid amount, not the judgment. The bid is what you owe. Misreading that at $90K is a $25K mistake.


      they just go down the line.. if the foreclosing lien is first position then they get what they posted as their opening bid  excess goes to any other liens recorded prior to the sale like a second loan or a judgement etc.. then excess would go to the owner..  IRS will not take the money at the sale they just have the right to redeem and pay the winning bidder statutory interest but in my 40 years of working with these I have only seen IRS jump in one time
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