Sheriff sale property

[Sandy Reddy]

Hi,

I am willing to buy a property that is listed in sheriff sale in NJ. Is it possible to deal this property directly with the bank ? Whats are the pros and cons of buying a sheriff sale property. And if i am the successful bidder how to send a eviction notice to the current person living in the property.

Regards,

Sandy 

[Rick H.]

@Sandy Reddy Welcome to the BP forum community.

Foreclosures differ widely from state to state. Also, many states have used the less cumbersome non-judicial sale procedures, thereby avoiding the more archaic judicial sheriff sales with its inherihent lengthy process. 

Your question suggest that you may be confused by terms; maybe not. Prior to final sale, the bank owns the secured debt (the mortgage) not the collateral (the real estate). 

Theoretically, you could buy the mortgage prior to auction, however in practice this is highly unlikely as institutional lenders do not favor selling loans once foreclosure plan executed, nor single mortgage sales. Never direct to consumers with cash, either.

Prior to foreclosure auction, you may purchase the real estate from the record owner and deal with the mortgage(s) and other liens at settlement. If the liens exceed value, a short payoff (aka short sale) must be negotiate with each record creditor. If equity exists, you may be willing to purchase the property 'subject to' the existing liens and take responsibility for their satisfaction.

If you buy at the foreclosure auction, which should be remembered as the forced liquidation sale of collateral, whether by judicial sheriff sale (or non-judicial trustee sale, in other states), you must perform your own due diligence, including researching title for other senior liens, in addition to valuation, repairs and occupancy status.

If the property goes to sale, reverts to creditor (rather than a 3rd party bidder) then that creates a situation whereby the creditor/bank turned owner may sell the asset, but not before. Banks prefer to employ licensed brokers to list and sell, and may not list for many months or even years for business reasons.

I suggest you keep your money in your pocket until you are convinced you are ready to become an thoroughly informed (and educated) bidder/buyer.