Sheriff Sale in Philadelphia

20 Replies

Hey folks,

I would like to hear your inputs about the sheriff sale process in Philadelphia.

Any successful experiences?

Thanks,

Andresa

Key words: foreclosure, philly, philadelphia, cash buyer

have not tried it out yet. But if anyone has I'm always interested in learning

I'd be interested to hear thoughts/experiences too. I believe there was a bigger pockets meetup on this earlier this week, but I was not able to make it.

I have no real experience at the Philly auction but I have a cousin who has successfully been purchasing for years.

That being said i attended an auction with him and learned an extremely valuable lesson.  The list came out and he found some opportunities that he was interested in but all went for money than he thought was a good price. And finally he bid on one and to his surprise no bids against him. that raised his suspicions... When we went to the property he realized he looked at the wrong place and the one he bid on actually was next door. It had no roof, no stairs , no walls in some areas a total tare down. He forfeited his down payment and learned a lesson he would not soon forget.

@Alex M. and @Ken Prause

There's a seminar at the Sheriff's office coming up about the bidding process at a Sheriff’s Sale. I think it would be helpful to attend it.

The next seminar in July is already fill out. The next one is on August 12th at 1pm at 100 S Broad St, 5th Floor. Phila. 19110. The registration can be done on line.


@Gil Lieblich

Thank you for sharing that experience. I heard similar stories about it!!

Is your cousin from NJ or PA?

thanks for the info Andresa but I have 2 props in the works right now. But it is definitly something I will be looking at eventually

Thank you Andresa Lobrace for sharing the information about the seminar.

I was at a Philly REIA meeting last night that went into detail about buying at Sheriff Sales.

@Alex M.

The meeting was yesterday Alex. I also could not make it. The speaker was Bill Becker founder of American Real Estate Investors.

Did any BP member attended this meetup?

My cousin is actually from NY.. but they have invested in Philly for many years.

The meeting was pretty good but it was more motivation than step by step. Basically he outlined how he got his first land lot from there for $4,000 and put down 10 percent and sold it for $6,000 before the rest was due.

I believe the land lot was in Fishtown but this was about 30 years ago.

Andresa Lobrace I have some experience with sheriff sales what would you like to know?

You have to beware of a major problem with auctions.

Generally when a person purchases a home, the lawyer does a title search to see if the property has any liens. You also can get a lot of information on the home like if it had a flooding, bad roof, etc through a home inspection.

Now if you win the auction that has a lien on the property - you are held responsible for that outstanding debt. So unless, you have a chest of money be careful. 

You also can't view the property like @Gil indicated and you could end of by a lemon. 

We have bought a few sheriff sale properties, and just bought one last month. 

The Good: The sheriff sale may be the only way to get a certain property. If a property is too far behind on taxes you can call the law firm that is handling the collections (find law firm at the bottom of these pages: http://www.phila.gov/revenue/realestatetax/default...) and ask them to bring the property to sheriff sale, if you give them a returnable $1,000 deposit they will contact you to settle the property before it goes to sheriff sale for the back taxes/liens/highest offer, or at minimum they will let you know when the auction will take place if you feel the price is too high. We have bought lots that were next to other lots we own and the sheriff sale was a last resort, and for that reason well-worthwhile. 

The Bad: If it is a Tax Sale Auction, you may not be able to get title insurance on the property for at least 1 year; this is due to the city reclaiming many tax delinquent properties without due process to the previous owner. This will cloud the title and you will not be able to sell your property for at least a year with a clean title. There are a lot of experienced sharks at the sheriff sales and prices have risen sharply in recent years, you can usually get better deals when you are NOT bidding against others.

I highly recommend going, sitting in the back a few times before bidding on anything. When you see a property you like, drive by it, walk by it, do your research, go to the auction with a bank certified deposit check and set an upper bid limit for yourself. Don't get caught up in the excitement and leave your emotions out of it. 

Does anyone think that there are positioned at the sales to pump up the price?

Originally posted by @Cliff Lasky :

...

The Bad: If it is a Tax Sale Auction, you may not be able to get title insurance on the property for at least 1 year; this is due to the city reclaiming many tax delinquent properties without due process to the previous owner. This will cloud the title and you will not be able to sell your property for at least a year with a clean title. ...

 Although there will be difficulty in getting title insurance, the reason why that is given in this snippet is not the only reason why. Philadelphia tax sales can come with a right of redemption that lasts for nine months from the date that the sheriff's deed is recorded. The right of redemption is another thing the title insurers are concerned about, and that is going to be the reason they require a year; if you do the math, the nine months of redemption leaves three months for the sheriff's deed to be recorded, and a sheriff's deed will usually record within that time. I do agree that "due process" (specifically proper notice to the property owner prior to tax sale) is also a factor, yet there are title company bulletins that specifically state redemption has to be considered so title insurance cannot be issued .

http://pennattorneys.com/assets/pennattorneys/asse...

http://www.firstam.com/assets/pennattorneys/asset-...

So you have the combination of two factors to consider for title to be insurable.

Originally posted by @Michael Simone :

Does anyone think that there are positioned at the sales to pump up the price?

The sheriff sale is run by a governmental agency in Philly. Of course it's corrupt.  

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