All Forum Posts by: James Triano

I frequently fund projects for investors at our local sales.  You are correct in that doing a prelim title search is a good idea.  There are a few areas to look out for, but for the most part, the hardest part is viewing all of the properties in a drive by before the sale.  You are not supposed to go into the properties but a drive by is always good.

Then you haven't seen enough of these; in undesirable neighborhoods in the suburbs, the bank's maximum bid will frequently be below the debt that was owed. 

seems like a lot of red flags are popping off. You should always do a title search before you purchase a property. There could be huge liens hence you bought the property cheaply. Maybe it was so cheap because other people did a search and saw 100k in liens. In that case, there is a high chance you would be responsible! Unless it's a judicial sale, but as you stated earlier it is not. Second, it's not uncommon if sheriff didn't notify the current homeowner, bank or anyone else who legally needs to be identified. You shouldn't partake in these games if you don't know the rules. By no means am I an expert. All I know is I sure wouldn't play if I don't the rules. I've heard some bad stories. Also, I believe in order to get title insurance you have to do a quit claim and trace down the pervious owner. Or you could sue them, but it's not easy and you need to hire an attorney. I would look into getting title insurance right away. Without it, your buyers market will shrink drastically.

@david krulac is an expert. Maybe he will share some insight. 

@James Triano 

@Matt F.

I have been to a few sheriff sales in my county.  Never bought anything there yet, but I am looking at buying some properties at tax sale soon.  

My experience has been that the bank hires a local attorney who shows up with a list of properties that he has been hired to buy.  When the sheriff offers them for sale he bids 'costs' on them.  Cost is just the fees that the sheriff charges to serve the papers.  If anyone tries to bid above 'costs' he then immediately bids what the banks max bid is.  I always assumed this is the current mortgage amount owed, but it may not be. If someone bids more than that he shuts up and they typically win the bid.  

I am curious as well how the sheriff can offer the property for sale (tax or sheriff sale) without serving proper notice.  That is the first time I have came across that concern.  I am even more curious as to how you know if they did of not?

I would also encourage others to make sure that they are developing their team!  My mentor gave me a name of a closing agency that he had done 30+ deals with (we are both buy and hold investors).  I have done a deal with them and they are FABULOUS!!! I still work a W2 job and I signed the closing papers on the street corner of my office building on my lunch break one time.  With the upcoming tax sale I called this closing agency to see what it would cost to run a title search on a few properties (I am looking at a property and my parents are looking at buying the neighbors).   Because of my relationship with him and my mentors past relationship with the closing agency, they offered to do the search and just tell us the results verbally without charging us a fee.  No insurance or anything, but the title work will have been done and done right.  

Hope this helps!  Would love to hear how others are fairing with these. My personal thoughts are that the risk is slightly higher (buying sight unseen, if you have to evict the current occupant they may trash the place, etc.), but if you do your homework (title search, etc.) you can get GREAT deals here.

Thanks @James Triano for the educational post.  i was long under the impression when the bank foreclosed, that they actually just took the property back since there was a mortgage on it. i didn't realize that they need to actually buy it at the sheriffs sale.  So if the bank is the winning bidder, where does that money go to? i think i am still a little confused on this subject.  thanks

FYI - Please be aware that each county in PA handles Sheriff Sales differently and you must understand the rules and regulations before bidding and winning a property. 

Most information can be found on the county's website - be cognitive of auction criteria such as type of  funds (for example Philadelphia county does not accept cash or personal check), amount of down payment, and when the balance must be paid in full. 

A few questions and comments:

1) Is the sale a bank REO or a tax sale? You need to look at the deed specifically.

2) Did the Sherriff serve the original owner properly? The Sherriff's office in Philly is notorious for doing a bad job of serving the owners. That may give the original owner a right of redemption period.

3) In the case of a tax sale, the right of redemption period is 6 months after the sale. If they were not served, the right of redemption period extends to 21 years. There is no right of redemption on vacant land.

4) There may be other liens on the property. Some may get wiped out. Yes, you need to do your title work. If some of the liens are utilities, you may be able to negotiate them. I've been successful in getting a 50% discount in the past. 

5) Title insurance can be difficult to get on Sherriff Sale properties. Some title companies will only insure after a 12 month "waiting period". Without title insurance, no bank will loan funds.

Feel free to contact me if you have further questions. I routinely buy properties from the Sherriff sale, and yes, it can be complex. Hope that helps.