Sheriff sale questions

[Todd Snyder]

My wife and I have been aggressively hunting deals in our market. Our goal is 6 deals this year which is a little scary for us, but we are determined to meet this goal! This property was up for sheriff auction but got cancelled a week before the bidding started. So we found the owner on Facebook and have started talking to him about buying it before he loses the house. We don't have much experience in sheriff sales and we are looking for advice form experienced Investors on how to approach this deal. We live and Invest in North East Ohio. Any laws or things we need to be aware of proceeding with this deal? There is a lock box on the door and it has been winterized. Does that mean the bank has taken possession of the property? If so then what reason would the auction get cancelled for a second time? Does the owner still have a right to sell us the property? Any help in all of these areas would be helpful! Thank you for your time in advance! Stay awesome BP!

[Chad U.]

Originally posted by @Todd Snyder:

My wife and I have been aggressively hunting deals in our market. Our goal is 6 deals this year which is a little scary for us, but we are determined to meet this goal! This property was up for sheriff auction but got cancelled a week before the bidding started. So we found the owner on Facebook and have started talking to him about buying it before he loses the house. We don't have much experience in sheriff sales and we are looking for advice form experienced Investors on how to approach this deal. We live and Invest in North East Ohio. Any laws or things we need to be aware of proceeding with this deal? There is a lock box on the door and it has been winterized. Does that mean the bank has taken possession of the property? If so then what reason would the auction get cancelled for a second time? Does the owner still have a right to sell us the property? Any help in all of these areas would be helpful! Thank you for your time in advance! Stay awesome BP!

I'm assuming the property is vacant.  If it has been secured and winterized then the bank likely sent their preservation company to perform this.  Most mortgages have clauses enabling the mortgagee to protect their interest, however doesn't mean they own it yet, unless the foreclosure happened.  

There are many reasons why a foreclosure may have been delayed.  Such as but not including a title issue discovered, an error in the foreclosure filings, the borrower filed for BK or reinstated the loan, etc. 

Yes the owner technically still has the right to sell the property if foreclosure hasn't happened, unless they filed BK.  However if there is more owing on the loan including legal fees, escrow advances etc than can be obtained from the sale, then this would be considered a short sale.  In this case, the bank may or may not accept this scenario and might require the borrower to make up the difference.  Each lender has different policies in this regard.