Purchasing a property at Sheriff Sale : Mercer County, NJ

Investor · Princeton, NJ · Member since 2017 · 105 posts · 22 votes

Dear All,

I own couple of rentals that were bought as a regular sale and would like to venture into auction sales. There are a couple of condo's from my neighbourhood that are on auction schedule on Sheriff Sale list. Can you please suggest what are the steps to take in purchasing a property at auction.

My common sense suggest below but want to know from experts if i am missing any other steps.

a) Hire a Title search company and look for title issues ?

b) Check with condo association for any unpaid dues

Also once i purchase at the auction, what's the process to get someone living there to vacate ? How many months i am looking at if i have a tough occupant.

Thanks!

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Jonathan GreeneBusiness Member

Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes

Thanks @Odie Ayaga . Hey @Chaits J. - there is a lot more to it than that, unfortunately. First, NJ auctions at sheriff's sale are:

1. cash only, 20 percent down at the time of auction

2. as-is

3. no inspections, no viewings (unless you seek out the homeowner in advance and get access on your own, which is rare)

4. you are responsible for all liens. Some will be disclosed on the sheriff's office website, some may not. Not all liens will be that easy to find.

5. you are responsible for holdover tenants and homeowners. If you have a tough occupant, I am less worried about the time it takes to get them out than the damage they may do while they are in the pending getting kicked out.

Best practices: find an agent who works the foreclosure circuit and knows how to assess the property in terms of it's renovated value versus upset value and potential first bid price. Also, they must be able to give you a full block valuation so you can see where the bottom and the top value of the block is. Some models show foreclosure properties at low values because of the status, but if you look at the block, the potential out value is much higher than it appears.

I hope this helps a bit.

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Odie Ayaga
Specialist · Delran, NJ · Member since 2016 · 2k+ posts · 951 votes
9y
@Jonathan Greene may be able to help you out
1 Reply
Jonathan GreeneBusiness Member
Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
9y
Thanks @Odie Ayaga . Hey @Chaits J. - there is a lot more to it than that, unfortunately. First, NJ auctions at sheriff's sale are:
1. cash only, 20 percent down at the time of auction
2. as-is
3. no inspections, no viewings (unless you seek out the homeowner in advance and get access on your own, which is rare)
4. you are responsible for all liens. Some will be disclosed on the sheriff's office website, some may not. Not all liens will be that easy to find.
5. you are responsible for holdover tenants and homeowners. If you have a tough occupant, I am less worried about the time it takes to get them out than the damage they may do while they are in the pending getting kicked out.
Best practices: find an agent who works the foreclosure circuit and knows how to assess the property in terms of it's renovated value versus upset value and potential first bid price. Also, they must be able to give you a full block valuation so you can see where the bottom and the top value of the block is. Some models show foreclosure properties at low values because of the status, but if you look at the block, the potential out value is much higher than it appears.
I hope this helps a bit.
[email protected]Podcast Guest on Show BiggerPockets Daily 667: 5 Amazing Benefits Multifamily Investments Offer (That Single Family Homes Don’t) by Gino Barbaro
Zen and the Art of Real Estate Investing59 Reviews
Website View Page
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Chaits J.
OP
Investor · Princeton, NJ · Member since 2017 · 105 posts · 22 votes
9y
Thanks a lot for your reply @Jonathan.
This property that i am interested is in our very neighborhood and i know the layout, market value, rental returns , worst case scenario fixing costs..etc. So point 1,2,3 are okay with me. Point:4 is where i want to cover all bases. Will running a title search gives me everything i need to know ?
I wish you work around Mercer county so that i would have worked with you on foreclosures..:-)
I am also looking for a good commercial lender and Title search company. Can you please refer someone whom you worked with before?
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Jonathan GreeneBusiness Member
Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
9y
@Chaits J. - a title search SHOULD yield all results to be weary of, but normally you can get most of it up front. With properties that end up at foreclosure, I never say anything is a guarantee and pre-title work can get expensive for multiple properties when you have to bid to win on them, before knowing the initial bid price (which often is too high). I sent you a PM for referral assistance in your area.
[email protected]Podcast Guest on Show BiggerPockets Daily 667: 5 Amazing Benefits Multifamily Investments Offer (That Single Family Homes Don’t) by Gino Barbaro
Zen and the Art of Real Estate Investing59 Reviews
Website View Page
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James Dodson
Flipper · Morrisville, PA · Member since 2010 · 36 posts · 6 votes
9y
@Jonathan Greene would you mind referring me to a qualified foreclosure agent as you described. I'm based out of Ewing NJ.
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Erik Cabral
Investor · Trenton, NJ · Member since 2017 · 97 posts · 60 votes
9y
@Rick Stein runs an REO business in this area @James Dodson. He may be able to help you.
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