Sheriff Sales - Foreclosure Auction Sales
Sheriff Sales – Live Your Dream of House Ownership
Sheriff Sales are forced sales designed to recover a disputed amount from a defaulting party to a contract. These usually take the form of auction sales and are packaged with attractive discounts.
Which properties form a part of the Sheriff Sales?
These properties come under the Sheriff's possession as per a legal process known as foreclosure. If a home loan borrower defaults on the installments repayment, the lenders attach the collateral property. County Sheriff puts up such properties for public auction sales to recover the outstanding amount.
Significant points related to Sheriff Sales
Database Research: After making up your mind about the most important considerations for choosing the property, scan the available databases to short list some of the properties meeting the basic requirements. This helps greatly in narrowing down the search at later stages.
Personal Visit: Personally visit the distressed properties of your choice to get their real picture. If you will give due regard to the condition of the property, you can control the post-acquisition cash flow on its repairs and maintenance.
Redemption Clause: Most of the foreclosure agreements contain the provision of a redemption clause, whereby the defaulting borrower has an option to reclaim the foreclosed property within a stipulated time. This redemption is subject to the repayment of the auction purchase price and interest, to the buyer of the foreclosed property.
Expert Counseling: Different states in the US have different laws governing the foreclosures and subsequent auction sales. Moreover, the legal complexities involved with foreclosure sales are higher than those with conventional property transactions. Therefore, it becomes imperative to seek expert advice in such matters.
Benefits of participating in Sheriff Sales
- Discounts: The prime motive of putting foreclosed properties to sale is to recover the amount in default. Therefore, the minimum bid price pegged on such properties carry big discounts from 10% to 50%, over their intrinsic value.
- Tax Credits: The provisions of the Foreclosure Prevention Act, 2008, go a long way in adding to the attractiveness of the foreclosed and the overall property market. One such welcomed initiative is the provision of the tax credit of $7,500, allowed to the first-time homebuyers. This credit can be availed spread in two years and is repayable over a period of 15 years @, 6.67% p.a.
- Payoffs: Although, the pricing of foreclosed properties makes them first preference of small homebuyers, they also find place as smart investment strategies for others. This is more relevant because of the upfront discounts available at the time of auction.