Sheriff's Sale Redemption Race - Occupied vs. Vacant
Hi Folks,
This is a Michigan-specific question for weekly Sheriff's sales:
What strategies do investors use to protect their purchases during the redemption period? Let's say the bank sets the bid amount on an occupied property for $50K and several investors bid it up to $90K because it's worth $120K....now the investor has $90K tied up for 6-months until the redemption window closes. Since the homeowner can redeem (at $50K, right?) what is stopping another investor from knocking on the door and offering $10K to homeowner for a quitclaim deed? Or said differently, $10K for the redemption rights? Or is that scenario an impossibility because the $40K overage will technically go into the homeowner's pocket? And what about the realtors who seem to be compiling lists of sheriff sale properties to (presumably) approach desperate homeowners to list with them during the redemption period?
I'm trying to figure out the pitfalls of buying properties through sheriff's auction and looking for ways to mitigate some of the risk. There are a couple properties I have my eye on that are going up for sale soon....I'm having a title company do title searches on each one to determine lien position...both properties are vacant, so the redemption period is only 30-days, but it's unclear to me if it is the foreclosing bank or myself as the sheriff's deed holder is the ("mortgagee") who determines if the property is "abandoned in accordance with MCLA 600.3241a"
Based an exterior inspection, the bank has already seized each property by installing padlocks on the doors and winterizing the plumbing. In these situations is it best to just sit tight for 4 weeks with my fingers crossed?
Best,
Marc