Sheriff sales

Foreclosures
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Sheriff sales

Dennis Hughes
Doylestown, PA · Member since 2014 · 3 posts · 1 vote

I've been to several sheriff sales in Bucks, Montgomery and Philadelphia counties in Pennsylvania. I've also done a lot of research both on bigger pockets and off. However, I keep coming across the same issue. To run title search on all properties can be cost prohibited. For example; last month in Bucks County they had over 300 homes up for auctions. 300 title searches could cost upwards of $30,000. I know I need a title search before I bid but $30,000 is too much. Additionally, when they publish the list of homes they post the real debt. However that doesn't match with the back calls out as their cost or what the starting bid price is. For example one property had real debt of $210,000 at the auction the bank called his cost at $86400 and the winning bid was $86500. Now I have to assume, I know you should never assume, this guy did his homework as he buys at least 1 property per month at auction. How do I identify what the banks cost or opening bid  is verses the real debt? With that i can determine the smaller number of homes to run comps and title searches on. I tried speaking with that gentlemen; but he must not be a bigger pocket member. He just sort of growled and walked away. Thanks everyone for the help.

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Barrett Dunigan
Investor · Bala Cynwyd, PA · Member since 2014 · 31 posts · 7 votes
12y

@Dennis Hughes I think you are getting ahead of yourself with the thought of running title searches on all the properties. Before understanding title, I would want to know which of the properties on the list are truly investible (depending on your risk appetite). This would mean starting with Google maps for the 30,000 foot view, and then a drive by the property to see if it is occupied and its condition. This will also help you understand the area and potential ARV (look at realtor.com and Zillow for comps of homes sold in the area). Next steps would be looking on the websites of the County Prothonatary and Recorder of Deeds. This will provide more information terms of lien holders and interests in the property. It's worth doing a bit of due diligence on your own, and you need to break down the list to something manageable. From there you can get a title search on the properties you are most interested in pursuing. Good luck.

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  • Barrett Dunigan
    Investor · Bala Cynwyd, PA · Member since 2014 · 31 posts · 7 votes
    12y

    @Dennis Hughes I think you are getting ahead of yourself with the thought of running title searches on all the properties. Before understanding title, I would want to know which of the properties on the list are truly investible (depending on your risk appetite). This would mean starting with Google maps for the 30,000 foot view, and then a drive by the property to see if it is occupied and its condition. This will also help you understand the area and potential ARV (look at realtor.com and Zillow for comps of homes sold in the area). Next steps would be looking on the websites of the County Prothonatary and Recorder of Deeds. This will provide more information terms of lien holders and interests in the property. It's worth doing a bit of due diligence on your own, and you need to break down the list to something manageable. From there you can get a title search on the properties you are most interested in pursuing. Good luck.

    4Reply
  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    12y

    Further reading:

    http://www.biggerpockets.com/forums/41/topics/6897...

    No real way to know or even guess at what the bank will want in advance of the sale. You just have to identify the properties you find desirable and how much you are willing to pay, then hope it actually goes to sale (and isn't postponed or stayed) and then hope you can get the winning bid below your max bid number. Easier said than done of course. 

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  • David SichermanPro Member
    Vendor · Lake Worth, FL · Member since 2014 · 713 posts · 149 votes
    12y

    If you're just looking for liens or judgments attached to the property you may be able to just have an O&E report done on the properties instead of a full title search which could save you some money. Just be sure to do your own Due diligence, and read over the supporting docs of the lien search, and ask questions if you don't understand something. Make sure you understand what exactly the scope of the search is, if they check for just liens & judgement or do they also check the tax status, federal tax lien search etc.. 

    1Reply
  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    12y

    BTW in the OP you mentioned Philadelphia. Philadelphia uses sheriff sales for both mortgage foreclosures and delinquent property tax (municipal lien) sales, and the rules for those two types of sales are different - so be aware what type of sale it is. Some of the suburban counties also conduct some municipal lien sales via sheriff sales too. 

    1Reply
  • David Mitchell
    San Luis Obispo, CA · Member since 2012 · 94 posts · 23 votes
    12y

    Yes, the investors we work with normally get somewhere between 6-10 searches for everyone 1 property they end up purchasing via sale.  So the total cost of the title due diligence runs about $1000 for each property they end up buying.  

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  • Richard D.
    Investor · Fort Worth, TX · Member since 2013 · 309 posts · 150 votes
    12y

    Wow, I do my own search and narrow it down to the three-four at each sale I'm looking at before I fork out the title company fees.  I have actually narrowed my list in a much more cost effective manor for myself. Out of these, I will buy 1-3.

    Granted, the up front labor is intensive once the list is available. It normally only takes me an hour to eliminate 90% of the listed properties.. Then another week to narrow it down to the select 3-4. At that point I go see the properties to determine my course of action. Evaluate rehab costs, to buy or pass,  and decide on potential exit strategies. 

    Then, I she'll out money to verify my findings, and guarantee I didn't miss anything.

    3Reply
  • Dennis Hughes
    OP
    Doylestown, PA · Member since 2014 · 3 posts · 1 vote
    12y

    Wow some great information. Thanks everyone for the help. So I fully understand the steps are

    1 Google maps or earth to take a 30,000 foot look at the properties.

    2 review Zillow or Realitor.com to project ARV

    3 review county and public records to determine possible liens

    4 now my search based on the first 3 steps

    5 Drive by to see condition or if occupied

    6 Reduce further based on driving by properties.

    7 title search only ones I have interest in buying.

    Did I capture everything or did I miss some steps?

    1Reply
  • Dennis Hughes
    OP
    Doylestown, PA · Member since 2014 · 3 posts · 1 vote
    12y
    Originally posted by @Richard D.:

    Wow, I do my own search and narrow it down to the three-four at each sale I'm looking at before I fork out the title company fees.  I have actually narrowed my list in a much more cost effective manor for myself. Out of these, I will buy 1-3.

    Granted, the up front labor is intensive once the list is available. It normally only takes me an hour to eliminate 90% of the listed properties.. Then another week to narrow it down to the select 3-4. At that point I go see the properties to determine my course of action. Evaluate rehab costs, to buy or pass,  and decide on potential exit strategies. 

    Then, I she'll out money to verify my findings, and guarantee I didn't miss anything.

    Richard, Thanks for the info. What criteria do you use to eliminate 90% of the listed properties? That sound like an hour well spent. Then what other criteria do you use to narrow your search down to 3 or 4?

    Thanks for your help.

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  • Richard D.
    Investor · Fort Worth, TX · Member since 2013 · 309 posts · 150 votes
    12y

    @Dennis Hughes I wrote a blog with some of the basics I use. There are other areas I use that apply to Texas, specifically. You may want to read over my list on My blog post. Then decide what you would do or not do to meet your needs there in Pennsylvania. 

    For example things that make a property automatically disregarded from my lists. Liens from state or federal governments, liens from funeral homes or morgue. In Texas these are superior to Tax Liens. Excessive additional taxes due; here you are only paying the judgement years. Attorneys can wait years to place a property on the auction block, if they. Think the owner will pay or no one is interested. Finally, the redemption period vs. anticipated ROI. Is my ROI worth the wait? Do I need to wait six months or 2 years for $1000.?

    Finally, I find this one is my biggest and most crucial eliminator. Exit strategies, how fast and how well I can unload a property. If I can unload a property in six months and make 30-50k by rehab, or do I just wholesale and make 1-20k. If it's raw land, do I build or sell to a neighborhood investor.  With tax deed sales in Texas, cash is king. If you don't have it on the day of the sale, you don't get buy your next property. So basically, how do I recoup my investment as fast as possible. 

    After all, my next sale is only 30 days away.

    3Reply
  • Don Harris
    Realtor · Charlotte, NC · Member since 2014 · 935 posts · 467 votes
    11y

    @Richard D. Your blog post is a definite read for anyone interested in this process!

    1Reply
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