What happens when the property is sold at auction for more than judgment?

[Matt Whiteside]

So what happens when a house is sold for more at auction than what the judgment is for? Does that surplus go to the homeowner?

[Steve Babiak]

Good topic. There is actually some "guru" type program tailored to do just as Matt describes.

About 10% to 15% of properties that go to sheriff sale in my county actually get bought by other than the bank. Those bids are definitely going to exceed what the bank hopes to collect. Whether those bids actually exceed what the bank is owed is another matter; banks are sometimes selling short at the courthouse these days. For the most part, those properties in that small percentage would have had some equity had the owner actually sold for the auction price before the auction!

Payoff of liens goes in order of lien priority. Anything above that does belong to the owner.

So, to do this in my county you would have to get a copy of the list of payoffs (30 days after sale, or longer sometimes). You would have to know what debts were in place that were at risk of getting wiped out, since anything that gets wiped out means nothing for that former owner. Oh, and to get the residual amount to that former owner you would have to know where they ended up moving to! Try finding that out, because most of the time the ones looking for them are looking to get paid (and not looking to give them money).