New Jersey Sheriff Sale

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New Jersey Sheriff Sale

Alkjad Lelaj
Member since 2022 · 1 post · 0 votes

Hello,

I'm interested in bidding on properties at sheriff sales in New Jersey. Before I do so, I have a few questions that I hope can be answered for me by someone who has both experience and knowledge in acquiring properties at New Jersey sheriff sales. It would help me a great deal.

1. I attend a sheriff sale in New Jersey, in which a property (for example: a single family home) has an upset price of $200,000. Now, I become the successful bidder at $300,000. Also, I've conducted a title search beforehand, which found no easements, restrictions, or judgments, but liens of a $100,000 1st mortgage and a $60,000 2nd mortgage. Aside from the $300,000 winning bid that I have to pay, is the mortgage that I need to pay based on lien priority, so based on which mortgage is foreclosing on that property?

2. Using the same example, after I conduct a title search, I find that the $100,000 1st mortgage is foreclosing on the property, so am I responsible for paying the $300,000 winning bid (since the $100,000 1st mortgage is already factored into the $200,000 upset price) and the $60,000 2nd mortgage is divested (wiped off completely)?

3. Vice versa, I find that the $60,000 2nd mortgage is foreclosing on the property, so am I responsible for paying the $300,000 winning bid (since the $60,000 2nd mortgage is already factored into the $200,000 upset price) and whatever amount is remaining on the $100,000 1st mortgage?

4. I'm interested in bidding on a property that has an upset price of $150,000.00. Now, a title search was conducted through a title company, in which they found no judgments, liens, easements, or restrictions, but just a $50,000 mortgage. Based on your experience, is this $50,000 mortgage already factored into the upset price of $150,000.00?

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Vaughn Smith
Property Manager · NJ · Member since 2017 · 786 posts · 396 votes
4y

@Alkjad Lelaj Hello, I'm not sure that I follow your questions, but here is a bit of advice to help you as it pertains to NJ Sherrifs auctions

1) Partner with a seasoned investor and/or attorney that have experience with sheriffs auctions, the sales are nuanced and there is a lot of due diligence that you need to do before placing your bid, the title searches are a great place to start but you shouldn't stop there you need to run OPRA reports, check city violations view the property (if possible) etc

2) Understand the redemption period and how it works, the auction isnt always over after you place a winning bid make sure you understand the redemption period before you spend additional funds, buy materials etc

3) Each county auction is a bit different as are the profile of the buyers/ level of competition make sure that you're prepared as some auctions the bids are very aggressive (almost nonsensical) and others they are a bit more laid back comparatively.

4) Not every property at an auction is a deal so don't bid blindly, auctions can be a great place to purchase a property but there are properties there that are also over valued and may not make sense based on your expected rate of return/investment strategy 

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  • Account Closed
    Investor · Member since 2020 · 64 posts · 29 votes
    4y
    Quote from @Alkjad Lelaj:

    Hello,

    I'm interested in bidding on properties at sheriff sales in New Jersey. Before I do so, I have a few questions that I hope can be answered for me by someone who has both experience and knowledge in acquiring properties at New Jersey sheriff sales. It would help me a great deal.

    1. I attend a sheriff sale in New Jersey, in which a property (for example: a single family home) has an upset price of $200,000. Now, I become the successful bidder at $300,000. Also, I've conducted a title search beforehand, which found no easements, restrictions, or judgments, but liens of a $100,000 1st mortgage and a $60,000 2nd mortgage. Aside from the $300,000 winning bid that I have to pay, is the mortgage that I need to pay based on lien priority, so based on which mortgage is foreclosing on that property?

    2. Using the same example, after I conduct a title search, I find that the $100,000 1st mortgage is foreclosing on the property, so am I responsible for paying the $300,000 winning bid (since the $100,000 1st mortgage is already factored into the $200,000 upset price) and the $60,000 2nd mortgage is divested (wiped off completely)?

    3. Vice versa, I find that the $60,000 2nd mortgage is foreclosing on the property, so am I responsible for paying the $300,000 winning bid (since the $60,000 2nd mortgage is already factored into the $200,000 upset price) and whatever amount is remaining on the $100,000 1st mortgage?

    4. I'm interested in bidding on a property that has an upset price of $150,000.00. Now, a title search was conducted through a title company, in which they found no judgments, liens, easements, or restrictions, but just a $50,000 mortgage. Based on your experience, is this $50,000 mortgage already factored into the upset price of $150,000.00?


     not a legal expert but proudly got burnt at a sheriff sale earlier this year!

    some locations (Philadelphia for example) you are not responsible but others, like the market i am in you are, the property I won had a large amount owed to an HOA which didnt come up on a title search. I would suggest you call the city you're interested in buying in as the people who work there can give you a clear answer if you are responsible or not

    hope that helps

    1Reply
  • Vaughn Smith
    Property Manager · NJ · Member since 2017 · 786 posts · 396 votes
    4y

    @Alkjad Lelaj Hello, I'm not sure that I follow your questions, but here is a bit of advice to help you as it pertains to NJ Sherrifs auctions

    1) Partner with a seasoned investor and/or attorney that have experience with sheriffs auctions, the sales are nuanced and there is a lot of due diligence that you need to do before placing your bid, the title searches are a great place to start but you shouldn't stop there you need to run OPRA reports, check city violations view the property (if possible) etc

    2) Understand the redemption period and how it works, the auction isnt always over after you place a winning bid make sure you understand the redemption period before you spend additional funds, buy materials etc

    3) Each county auction is a bit different as are the profile of the buyers/ level of competition make sure that you're prepared as some auctions the bids are very aggressive (almost nonsensical) and others they are a bit more laid back comparatively.

    4) Not every property at an auction is a deal so don't bid blindly, auctions can be a great place to purchase a property but there are properties there that are also over valued and may not make sense based on your expected rate of return/investment strategy 

    1Reply
  • Gina SternPro Member
    Investor · Boca Raton, FL · Member since 2019 · 1k+ posts · 159 votes
    4y

    I am an investor in the Florida market, it seems there are very few online Sheriff Sales auctions in New Jersey, is this changing anytime soon? Thanks for the heads up!

    [email protected]561-430-2616
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