Anybody have experience with County Sheriff's Auctions?

Question

Does anyone have any experience with Foreclosure Auctions? I have an app on my phone that has a huge list of foreclosures up for auction in the area that I'm looking for. Are these a good way to find good deals or are these more like a good ol boys club and I'll just be wasting my time. It looks pretty amazing but I didn't want to get my hopes up if it's more smoke and mirrors. Thanks.

Lisa Williams · Answer

I watch the sheriff sales here in Tulsa very closely. If they are clean, meaning no additional liens have been placed on them, they can be great deals. I would recommend you find an investor friendly realtor, who can help with information from older MLS listings. Many of these properties are now listed on auction sites, like Auction.com, and investors can get some info there. Sometimes the auction site will disclose if the property is occupied, which is really important. If it is occupied, the new owner might be required to deal with an unwanted tenant/former owner, which won't be fun or cheap. Even if you decide not to purchase at the Sheriff Sale, you can have the research done and be ready of the property comes back as an REO, thru HUD, Fannie Mae, Freddie Mac or the VA. Many great properties have liens on them and will go back to the bank to wind up an REO, and then should have a clear title/deed. I hope this helps!

Jerry W. · Answer

It is very important to know what other liens if any are on the property and what ones will be wiped out by the foreclosure and what ones will not.  My state has statutory redemption laws that give the owner 90 days to pay the money back and keep the property. Sometimes another buyer will run to the current owner and pay him to use the redemption and buy the property out from under you.  The long and the short is however if you have the money and bid highest you get the property.  Good old boys club or not it is the highest bidder who gets it.  Just don't get caught up in the bidding process and pay too much.

Robert Ellis · Answer

Hi Joshua,

One of the best things to do when dealing with an auction property is to attend a few (not just one) auctions so that you become familiar with the process and the speed at which they operate.  I can only speak to property auctions here in Ohio, but there are many people that buy auction property for themselves and others all day everyday and they are really good at the process.  Watch a couple of these folks and how they operate and that will be a big help when you go to purchase a property you want at auction.  Hope this info helps!

Joe Facenda · Answer

@Joshua Hilliard I don't know how this plays our  on your side of the river but on my side in Northern Virginia, it is extremely tough to make money at foreclosure auctions.  (Fairfax County, Prince William, Loudoun) First there are a number of experienced investors at every auction who know the good stuff and will lay off the bad stuff.  But more importantly, there are tons of new investors who will make crazy unprofitable bids on properties.  Will they be "one and done"?  Usually. But new ones always take their place.  My experience there (I do not buy but have worked closely with a few of the big players) is that in a strong market like we have now, there are just too many bidders.

One of the posters mentioned knowing title issues.  This may differ state by state but in VA, that is not as much of a concern.  You need to know basically 2 things - the position of the loan foreclosing and if there are any IRS or tax liens. Everything else pretty much goes away.

If there are clouds on the title, I am pretty sure the deal will be voided.  But IRS liens, tax liens and having to pay off a 1st trust are not clouds on the title.  If that is why you don't proceed your EMD is gone.

And, yes, you are bidding blind.  You can not see the property.  Some are great (Once had a client buy a home that needed a little carpet and paint and generated a $100,000 profit. He also got a car which I think he eventually sold.)   Others are full of surprises - pipes that burst over the winter and filled the home with mold.   The ARV on both properties is easily obtained but the scope of work is completely unknown.

The only somewhat successful person I worked with had deep pockets and bid on multiple properties a month.   She knew some would be losers and some would be winners, but by buying enough she would likely come out ahead.  Trying to find the right one and pinning your hopes on that property is a path to bankruptcy.

Not for the faint of heart.

Ron Flatt · Answer

Sheriff sales have been great to me.  Over half of my rentals came from tax sales.  Usually they need plenty of work, but it has worked for me.

Different states may be different.

Mike Lowry · Answer

Not a " good ole boys biz... " is just plain footwork and research.. of every kind. The real trouble is the Federal Government can just make the land ( any land ) a " FLOOD PLAIN" not base in fact many times  as done by computer " best guess " . Could be real, could be a mistake. However, if that happens the " Gov " never notifies the owner in my experience and may not be in the local records either unless the offices are up to speed on such. Most of the cities I look at do not have the info. The fed has free maps if you really search... if not call for help. Why? Well if any insurance company knows ( they really are ones behind this new biz) they will not make good on flood damage unless you have upgraded. Why would you do so if unknown to the public by required notification from the FED. No one will know... until it is too late. Just learned bout it 3 mo ago while updating data on my properties. Lucky I had already sold the ones in the new update !!!! While down the street I have a lot.. that is just in the safe line . But looking to sell or trade as FEDS could change without notice and is on a creek and below a lake..yeah .. just sharing. Happened I found out 3 months  ago but, the properties in the FLOOD PLAIN were sold 3yrs ago. No info on when this federal designation actually occurred as law. Called feds.. they are clueless idiots.. took hours just to find anyone that knew what I was asking bout' . Lucky the buyers did not know when purchased and is not required in my local to have included in the sale as the owner(s) are on the hook cause is the Feds.. and most local gov doesn't have the info either. My county did...but was not available when I sold the properties unless you had a friend in the Fed..  The county got the info integrated into the public system bout' 18mo. ago. They could not tell me when the designation was actually made by the feds either.. but said could have been as long as 6-8 years ago !!! The power of idiots with money in Government...

Kenny Reits · Answer

Key is to know how to research - that is what I am trying to track - No one mentions exactly how to find out if their are any liens etc.

Anybody have experience with County Sheriff's Auctions?

Most Popular Reply