How To Win At Sherriff Sale

How To Win At Sherriff Sale

In the city of Philadelphia roughly 10,000 homes are listed for sheriff sale each year. Auctions are held up to five times a month. There is inherent risk associated with buying property at Sheriff Sale but it is a calculated risk, one that research and preparation can minimize. 

Properties scheduled for auction are posted ahead of time on the Philadelphia Sheriff’s Office website. You should gather as much information as possible and know exactly what you’re willing to pay for the property before bidding. You’ll need to put down 10% that day. The rest needs to be paid within 30 days. You can drive by, search public record or do a title search on properties of interest. 
Properties end up at sheriff sale for two reasons: delinquent taxes or mortgage foreclosure. Tax sales are often a better bargain but they’re trickier because of the “right of redemption,” whereby the homeowner has 9 months to buy back their property for 110%. Because of this, no title insurance company will insure a tax sale property until at least 12 months after the sale, which will also limit the ability (for you or a potential buyer) to get financing during that time. So be prepared to own a tax sale property for at least 12 months. 
 
Mortgage foreclosure sales don’t have the “right of redemption”. But likewise, title companies will not insure a mortgage foreclosure property bid on and won at Sheriff sale until the deed is recorded by the Sheriff’s office and that can often take several months to do. 
Both scenarios require cash up front and a true understanding of the process. It’s a good idea to sit in on an auction and learn the rhythm before getting involved. You’ll notice a few investors bidding over and over again. Sheriff Sale regulars do their homework and they tend to do volume. You can watch a short sheriff sale seminar here.
 
If you need financing for a real estate investment or development contact Direct.  We are fast, flexible and fair. We offer creative solutions that make real estate projects happen.

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